Office rents up 2.4% in 2Q2022 on return-to-office momentum
Catherin He, head of research, Singapore at Colliers, mentions that the rental growth was broad-based, with mean rental fees of both Classification 1 and Group 2 office boosting q-o-q by 0.9% and 4% specifically. Based upon a basket of office buildings tracked by Colliers Research study, rents of the Core CBD Premium & Grade A section grew by 1.8% from the preceding quarter to $11.10 psf each month.
However, she prepares for full-year progress for CBD Grade A gross efficient rents might still increase the 4.3% appeared 2021, given that they have currently risen by 5% in the initial part of the year.
“This favorable take-up was most likely contributed by variation activity, as well as new set-ups in the legal area and also non-bank financial institutions,” remarks Tricia Song, CBRE head of study, Singapore and Southeast Asia. Song adds there was even a loss of 473,612 sq ft in office supply, likely due to the removal of AXA Tower as it began demolition jobs, which further sustained reduced vacancy rates.
Looking ahead, while the return-to-office momentum will certainly carry on driving the workplace leasing market, there are signs that international financial headwinds are beginning to influence some occupiers’ realty choices, which might temper office interest in 2H2022, claims Tay Huey Ying, head of research study as well as consultancy, Singapore at JLL.
Office rental fees in the Central region grew by 2.4% q-o-q in the second quarter, according to information launched by URA on July 22. This is greater than the 1.6% increase reported in the previous quarter and marks a 3rd consecutive quarter of progress.
Lam Chern Woon, head of research study and consulting at Edmund Tie, emphasize that remarkable leasing activity in 2Q2022 consists of Amazon’s reported take-up of 369,000 sq ft of space at the upcoming IOI Central Blvd Towers and Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, doubling its office footprint. The upcoming Guoco Midtown property also obtained grip in leasing undertaking throughout the quarter, with renters like ConocoPhillips as well as Swiss Re coming on board.
The more powerful performance was underpinned by Singapore better easing workplace constraints, with 100% of employees enabled to go back to the office since April 26.
Leonard Tay, head of research study at Knight Frank Singapore, thinks that office rental fees will hold firm regardless of a possible recession, backed by demand driven by the “flight to safety” to Singapore by exclusive affluent, corporates and also MNCs. Knight Frank preserves a calculation of 3% to 5% development in leas for the whole of 2022.
The islandwide office openings rate reduced by 0.8 percentage indicate 12%, driven by positive net absorption of 258,334 sq ft in 2Q2022. This notes a turnaround after 5 consecutive quarters of adverse net absorption.
