Cracks appearing in Singapore’s prime office rental market as rent growth eases

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RENTS in the prime Raffles Place/Marina Bay precinct grew 1.3 per cent in the first half of 2024, slowing from the 2.5 per cent increase from the year-ago period, according to a report by Knight Frank on Monday (Jun 24).

On a quarterly basis, prime office rents rose 0.7 per cent in the second quarter to an average of S$11.28 per square foot per month, up from the 0.6 per cent growth seen in the first.

Despite the larger islandwide trend of rents either holding or increasing marginally, some landlords have started to adjust their rental expectations, especially for buildings with pockets of available space,” said Knight Frank.

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Data from Cushman & Wakefield (C&W) showed that Central Business District (CBD) Grade A office vacancy rose to 5.4 per cent during Q2, from 3.6 per cent in Q1.

The rise in vacancy was due to the completion of IOI Central Boulevard Towers and Odeon 333 with a combined net lettable area of 1.3 million square feet (sq ft) which outweighed net demand of 0.6 million sq ft in Q2.

“Many Grade A office landlords, assured by high occupancy rates, continue to be sanguine on the prospects of the Singapore office market and have largely held on to their asking rents” said Jeryl Teoh, senior director and co-head of commercial leasing at C&W.
Source: Business Times