Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Prime business leas in the Raffles Area and Marina Bay district increased to around $11.20 psf monthly (pm) in 1Q2024, a 0.6% surge q-o-q, according to a record by Knight Frank Singapore published on March 25.
A brand-new supply of prime business is even expected to be finished this year, boosting the remaining supply. This includes IOI Central Blvd Towers at 2 Central Blvd, which is anticipated to generate 1.26 million sq ft of workplace, and 33-storey Keppel South Central throughout Hoe Chiang Roadway in Tanjong Pagar.
However, he believes office space leas might smooth out in 2H2024 as tech firms and international financial institutions lay off staff and settle organization affairs, which can lead to sections of office space being reverted upon lease expiration.
Yeo indicates that the need for prime office spaces continues to be high because Singapore remains to appeal to global firms. This results from the large pool of skill, tax benefits, a diversified overall economy and contemporary framework.
On the other hand, Yeo expects that companies should approach this year with “mindful confidence,” given that geopolitical stress pose a considerable risk to business growth and operations. He additionally anticipates occupancy levels to continue to be strict at quality office complex that can regulate a premium, supported by Singapore’s minimal unemployment level and the city-state’s setting as a premier business location. Knight Frank estimates leas to grow reasonably in between 1% and 3% in 2024.
The rent increase was sustained by renewals, maintaining tenancy status close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the overall CBD. Calvin Yeo, managing executive of occupant approach and solutions at Knight Frank Singapore, adds that the renewals were done at a little greater rents as companies preferred to remain as opposed to relocating or developing to stay away from capital investment.
