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A Promising Future for Raffles Place

Colliers REview Singapore blog - A promising future for Raffles Place

The epicentre of business continues to command a premier position in Singapore's micro-market.


While we’ve seen decentralisation of offices out of the central business district (CBD) in recent times, Raffles Place remains an epicentre of commerce, business and finance, attracting developers and occupiers alike to the commercial heart of Singapore.

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Premier position in Singapore micro-market

With a blueprint for the area’s urban transformation already in the works, Raffles Place/New Downtown solidifies its compelling position as the CBD’s most attractive rental rate for new builds and redevelopments. New Premium and Grade A builds are commanding higher rents in Raffles Place/New Downtown than other locations. This bodes well for investors on the hunt for prime city-centre assets.

Colliers REview Singapore blog - A promising future for Raffles Place - New builds command premium rents

Rental growth since 2016: Raffles Place/New Downtown (Premium and Grade A) new builds command higher rents (click to enlarge)

 

Higher value in the city centre

In simple terms, capital value is a function of long-term and forward-looking rents, occupancy and cost of capital.

Capital values for Premium and Grade A office buildings in the Raffles Place/New Downtown area rose higher than average CBD capital values historically. This could be due to various reasons, such as higher long-term potential growth, higher potential occupancy, or lower cost of capital or borrowing costs, depending on market conditions.

Colliers REview Singapore blog - A promising future for Raffles Place - Higher capital values

Capital values for Raffles Place/New Downtown Premium and Grade A office buildings rose higher than average CBD capital values historically (click to enlarge)

 

The CBD’s many attractive attributes continue to make it an investment magnet. With many buildings in the area undergoing rejuvenation or redevelopment, the overall built environment will be enhanced, further supporting real estate values and the promising future of Raffles Place.

 

Colliers REview Singapore blog - A promising future for Raffles Place - 5-year rental uplift infographic

Raffles Place commands premier position in Singapore's micro-market (click to download)

 

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