Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Prime office leas in the Raffles Place and Marina Bay precinct went up to approximately $11.20 psf each month (pm) in 1Q2024, a 0.6% raise q-o-q, according to a report by Knight Frank Singapore published on March 25.
However, he thinks workplace leas may flatten out in 2H2024 as tech companies and global banks lay off staff and consolidate business functions, which might cause parts of office being returned upon rent expiry.
Yeo mentions that the demand for prime office remains high because Singapore remains to attract international companies. This is due to the vast pool of skill, tax obligation incentives, a diversified economy and modern facilities.
The rent buildup was supported by renewals, keeping term status close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, managing administrator of tenant approach and solutions at Knight Frank Singapore, includes that the revivals were accomplished at slightly greater rental fees as companies decided to remain as opposed to moving or expanding to stay away from capital expenditure.
A new supply of prime business offices is even anticipated to be completed this year, raising the remaining supply. This includes IOI Central Boulevard Towers at 2 Central Boulevard, which is expected to produce 1.26 million sq ft of office, and 33-storey Keppel South Central along Hoe Chiang Road in Tanjong Pagar.
At the same time, Yeo prepares for that businesses need to approach this year with “careful optimism,” given that geopolitical stress pose a considerable threat to company development and procedures. He additionally expects occupancy levels to remain strict at top-notch office complex that can regulate a premium, backed by Singapore’s minimal unemployment level and the city-state’s placement as a premier business enterprise place. Knight Frank estimates rental fees to expand reasonably in between 1% and 3% in 2024.
