Shares of property firms with significant exposure to the office segment were up on Monday as investors were more upbeat due to rising office rentals and falling vacancy rates.

At 11:13 a.m., shares of Hongkong Land <HKLD.SI> were up 2.5%, City Developments <CTDM.SI> gained 2.3%, while Keppel Land <KLAN.SI> and CapitaLand <CATL.SI> rose 1% each.

“The rentals are up quite substantially compared to what the market expectations were. Therefore developers associated with the office space are gaining a lot of momentum,” said Vikrant Pandey, an analyst at UOB Kay Hian.

“The residential segment has nearly come to a new peak, while the office segment is still at a deep discount, so the pick-up in demand is gaining more traction compared to other segments like retail and industrial,” he added.

Pandey wrote in a report that the average monthly Grade A office rental has risen 11.1% year to date to $9 per square foot, while office vacancy rate fell to 2.8% in the third quarter this year from 6.4% in the second quarter.

A local trader also said that investors may be more optimistic and wiling to take more risk in trading stocks.

“Today the whole Straits Times Index is up like 1%. I think property is a risk play,” the trader said.