Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Prime office rental fees in the Raffles Place and Marina Bay district went up to around $11.20 psf monthly (pm) in 1Q2024, a 0.6% surge q-o-q, according to a statement by Knight Frank Singapore published on March 25.
The lease buildup was maintained by renewals, maintaining tenancy levels tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, managing executive of occupant strategy and services at Knight Frank Singapore, adds in that the revivals were done at somewhat greater rents as companies preferred to remain instead of relocating or expanding to stay away from capital investment.
A new source of prime business offices is also expected to be finished this year, boosting the existing supply. This includes IOI Central Boulevard Towers at 2 Central Blvd, which is expected to generate 1.26 million sq ft of office space, and 33-storey Keppel South Central around Hoe Chiang Road in Tanjong Pagar.
Yeo notes that the interest for prime workplace remains high because Singapore remains to appeal to international corporations. This results from the large pool of talent, tax obligation rewards, a varied market and modern infrastructure.
On the other hand, Yeo expects that businesses need to close in this year with “careful optimism,” given that geopolitical stress position a considerable risk to service growth and procedures. He likewise expects inhabitance levels to continue to be strict at top-notch office buildings that can command a premium, reared by Singapore’s minimal jobless rate and the city-state’s setting as a premier business area. Knight Frank estimates leas to grow moderately between 1% and 3% in 2024.
Nonetheless, he believes office rents may straighten out in 2H2024 as technology companies and international banks lay off staff and consolidate business affairs, which might result in portions of workplace being moved back upon rent expiration.
