SINGAPORE OFFICE MARKET - THE INFLUENCE OF MICRO-FACTORS ON OFFICE RENTAL

Abstract

This dissertation attempts to determine the major micro-factors that affect the office rentals, and examine the sensitivities of the rental levels to changes in these micro-factors through the Multiple Regression Analysis undertaken using the Statistical Analysis System. The general finding was that the service charge levied, number of carparks, net lettable area, length of lease, location of tenants in the building and the age of the building are significant determinants in the level of office rentals that can be commanded. Such information can serve as a basis for an investor/developer to set rents at realistic levels, subject to the position of his property within the market. He ought to complete a thorough comparable marketing survey assessing his property's location, rental rates, age, service charges, incentives and amenity package and features. Knowing one's product and its relative value within the market allows one to anticipate potential trouble areas. It is of extreme importance to believe in one's property, but do not, at the onset, price one's product unrealistically out of the market. Correct pricing is, therefore, vital!