Singapore office rents fall in 3Q2023 on weaker demand: JLL
JLL’s research shows that gross reliable lease for Grade A workplace in the CBD fell 0.3% q-o-q to an average of $11.29 psf per month in 3Q2023, below $11.32 psf per month in 2Q2023.
He connects the lower hires to extra supply from office stock being returned to the marketplace “at a raising pace” as more occupants right-size upon rental renewal to take care of costs.
Tay Huey Ying, JLL Singapore’s head of research as well as consultancy, concords, adding that workplace lease improvement became more extensive this past quarter. “Our evaluation displays that greater than 15 investments commanded lesser leas in 3Q2023 than in 2Q2023, which grabbed down the average rents for CBD Level An area for the first time ever since they turned around in 2Q2021.”
Singapore business office leas slid in 3Q2023, according to data documented by JLL in a Sept 25 announcement. The consultancy adds in that it marks the initial quarterly downtrend following 9 consecutive quarters of office space rental growth in the city-state.
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She prepares for descending strain on workplace rental fees to heighten, with leas correcting further in the coming months in the middle of the current macroeconomic setting as well as arriving workplace supply. “Opposing the backdrop of an increase of upcoming projects fighting for a very little pool of lessees, the short-term oversupply of office space might become a lot more noticable,” she includes.
The decrease comes from recurring economic pressures, says Andrew Tangye, head of office space leasing and advisory for JLL Singapore. “The unsure near-term outlook coming from a mix of slowing financial progress, geopolitical stress and rising prices have continued to maintain occupiers wary plus cost-conscious, leading to weak office take-up,” he adds.
3 office projects are set up for conclusion in the CBD over the next 24 months– IOI Central Boulevard Towers (1.3 million sq ft) and also Keppel South Central (0.6 million sq ft) in 2024, and also the redeveloped Shaw Tower (0.4 million sq ft) in very early 2025. JLL states that to date, over 1.5 million sq ft is estimated to be still uninvolved.
Beyond the temporary headwinds, the medium-term overview for Singapore’s Level A CBD workplace renting out market continues to be brilliant, JLL opines. Need will certainly be supported by Singapore’s burgeoning reputation as an international center, while the supply of workplace in the CBD will remain constricted by a scarcity of greenfield locations along with URA’s focus on adding even more live and play spaces downtown.
