Shorter leases for commercial land unlikely to depress CBD Grade A office rents

IF AND when the Singapore government releases more commercial sites with lease durations below 99 years, there could be downward pressure on rents of some office spaces, especially those in suburban locations.

However, Grade A buildings in the Central Business District (CBD) are unlikely to face significant competition from these shorter-tenured spaces, real estate analysts told The Business Times (BT).

The Urban Redevelopment Authority (URA) is exploring rolling out more short-term lease sites to provide more options and flexible spaces, under its latest Long-Term Plan Review (LTPR). This will potentially allow Singapore to refresh its land uses in shorter cycles.