Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
The lease buildup was maintained by renewals, maintaining term levels close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the overall CBD. Calvin Yeo, managing director of occupant strategy and services at Knight Frank Singapore, adds that the renewals were completed at somewhat higher leas as business chose to hold as opposed to moving or developing to keep away from capital expenditure.
Yeo indicates that the demand for prime workplace remains steep since Singapore continues to appeal to multinational corporations. This results from the vast pool of talent, tax incentives, a varied market and contemporary infrastructure.
Prime office space rents in the Raffles Area and Marina Bay precinct went up to around $11.20 psf each month (pm) in 1Q2024, a 0.6% raise q-o-q, according to a record by Knight Frank Singapore released on March 25.
Nevertheless, he believes office rents might flatten out in 2H2024 as tech companies and global banks lay off workers and settle service functions, which could cause parts of office space being returned upon rent expiry.
A new supply of prime offices is even expected to be completed this year, raising the occurring supply. This includes IOI Central Boulevard Towers at 2 Central Boulevard, that is anticipated to produce 1.26 million sq ft of office, and 33-storey Keppel South Central around Hoe Chiang Road in Tanjong Pagar.
At the same time, Yeo prepares for that establishments must approach this year with “cautious optimism,” given that geopolitical tensions pose a considerable danger to service growth and operations. He also expects inhabitance degrees to continue to be strict at quality office complex that can control a premium, supported by Singapore’s small joblessness rate and the city-state’s placement as a premier operation spot. Knight Frank approximates leas to increase reasonably between 1% and 3% in 2024.
