ROBUST DEMAND FROM NON-FINANCIAL CBD TENANTS IS LIKELY TO

DRIVE A 2013 UPLIFT IN RENTS

• CBD rents softened further during Q4 2012
• CBD vacancy rates are likely to tighten further due to moderate supply into 2013; and rentals are expected to stabilize
• The government has adopted a long-term plan to decentralize business activities to commercial centres outside the Central Business District (CBD) by earmarking the development of suburban commercial centres
• Leasing activities are expected to remain healthy next year with more diversified demand
• Outlook for Singapore Office Market remains positive

Singapore - Cushman & Wakefield, the world's largest privately held real estate firm, summarise their key findings on the 2012 Singapore Office Market from the Q4 MarketBeat update - and forecast their predictions for 2013.

CBD rents softened further during Q4 2012 - Average rents in the CBD, comprising Marina Bay, Raffles Place and Shenton Way fell a further 1.6% from 3Q12 to $9.00 per sq ft per month in the current quarter, while rents in Orchard and City Hall/Marina Centre remained largely stable. Rental gaps between the CBD and its fringes have narrowed significantly during the year.

CBD vacancy rates are likely to tighten further due to moderate supply next year; rentals are expected to stabilize - The low vacancy rates and positive demand is expected to support office rents in 2013. However, at the current levels, demand is not strong enough to support a rental recovery next year; any sign of a meaningful recovery in rentals may only emerge in the second half of 2014.

The government has adopted a long-term plan to decentralize business activities to commercial centres outside the Central Business District (CBD) by earmarking the development of suburban commercial centres - Notably, the wave of good quality office space supply will be concentrated in the suburban areas, which is estimated to be about 2.4 million sqft, and this is expected to be delivered during the next two years. The next wave of leasing activities will likely be at The Metropolis - which will provide slightly more than one million sq ft of quality office space and has attracted enquiries from numerous notable corporations and multinationals.

Leasing activities are expected to remain healthy next year with more diversified demand - Requirements from the Financial Sector have tapered off. 'Fresh blood' tenants from the legal services, e-commerce, FMCG, professional services and energy industries are expected to command a significant share of new leasing activities in 2013.  In addition, there will be some demand arising from tenants moving out from old office buildings. The softer rentals of Grade A office buildings could prove attractive to many non-financial tenants; the majority of new leases sealed are likely to be for spaces that are less than 30,000 sqft.

The outlook for the Singapore Office Market remains positive:

Sigrid Zialcita, Managing Director for Cushman & Wakefield's Research team in Asia Pacific comments:  'While the estimated 7.2 million sq ft of office space expected to come on stream in the CBD over the next five years could restrain rentals, the is likely to be positive for the economy as the business cost would be kept manageable. Shadow space, which had threatened to spiral in the second quarter has also stabilized. Total known supply of shadow space, estimated to be just above 400,000 sq ft is down from the half a million in Q3 2012; 68% of these are in the CBD. For companies who are attracted by Asia's rise, the island's status as the region's and one of the continent's gateway cities will continue to sustain demand for office space. Interest in strata projects, of which a few would be launched next year, should benefit from the sustained low interest rates.'

Conclusion

Toby Dodd, Country Manager for Cushman & Wakefield Singapore comments:

'Despite the total square footage of available space there are limited CBD options for requirements above 30,000 square foot.  This coupled with a raft of new and diverse non-financial tenants leads Cushman & Wakefield to believe that Q4 2012 will see the likely bottom of the Singapore Office Market as we enter a U-shape rebound in office rents.

-ENDS-

For further information, please contact:

MEDIA CONTACT:

Vogel Goodwin

+ (65) 8133 1706
tula@vogelgoodwin.com/fiona@vogelgoodwin.com

RESEARCH CONTACT:

Sigrid Zialcita

+ (65) 6232 0841

sigrid.zialcita@ap.cushwake.com

Visit Cushman & Wakefield's Knowledge Center at www.cushmanwakefield.com to access other reports on leading real estate issues, trends and market statistics from around the world.

About Cushman & Wakefield

Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. Founded in 1917, it has 234 offices in 61 countries and more than 13,000 employees. The firm represents a diverse customer base ranging from small businesses to Fortune 500 companies. It offers a complete range of services within five primary disciplines: Transaction Services, including tenant and landlord representation in office, industrial and retail real estate; Capital Markets, including property sales, investment management, investment banking, debt and equity financing; Corporate Occupier & Investor Services, including integrated real estate strategies for large corporations and property owners; Consulting Services, including business and real estate consulting; and Valuation & Advisory, including appraisals, highest and best use analysis, dispute resolution and litigation support, along with specialised expertise in various industry sectors. A recognised leader in global real estate research, the firm publishes a broad array of proprietary reports available on its online Knowledge Centre at www.cushmanwakefield.com.