BUSINESSES are growing on the back of the economic recovery and driving up rents for office and industrial space in the process.

The rent rises came despite an increase in the vacancy rate and reduced take-up and point to firms securing suitable sites at what are still attractive prices.

Overall rentals increased by 6 per cent in the third quarter, compared with a 1.1 per cent rise in the second and a 0.4 per cent lift in the first three months of the year, according to Urban Redevelopment Authority data on Friday.

The median Category 1 office rent was $8.45 per square foot (psf) per month for the three months to Sept 30, up on the $8.26 level for the previous quarter. Category 2 offices - which makes up 80 per cent of all office space - commanded $5.05 psf per month, up from $4.76 in the second quarter.

Rentals of multiple-user factory space increased 5.3 per cent in the third quarter compared with 1.7 per cent in the previous quarter while prices rose 8.8 per cent, up from 5.4 per cent.

Growing businesses, rising rent