Skinny yields on prime office buildings may not be sustainable

Singapore’s office property market enjoyed a strong run in 2022. But capital values of office buildings here could come under pressure because of high interest rates.

The Urban Redevelopment Authority’s central region office rental index rose 11.7 per cent in 2022, after rising 1.9 per cent in 2021.

The valuation of the Singapore office assets of leading office landlord Keppel Real Estate Investment Trust : K71U 0%(Keppel Reit) rose 2.3 per cent between end-June 2022 and end-December 2022 to S$7.2 billion.