Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank

Prime office leas in the Raffles Place and Marina Bay district rose to an average of $11.20 psf each month (pm) in 1Q2024, a 0.6% surge q-o-q, according to a record by Knight Frank Singapore launched on March 25.

The rental fee buildup was maintained by resumptions, retaining tenancy status close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the overall CBD. Calvin Yeo, supervising executive of occupant approach and answers at Knight Frank Singapore, adds that the renewals were done at somewhat greater rents as firms opted to stay instead of moving or widening to stay away from capital investment.

A brand-new source of prime business is even anticipated to be finished this year, boosting the presenting supply. This includes IOI Central Boulevard Towers at 2 Central Boulevard, which is expected to produce 1.26 million sq ft of office space, and 33-storey Keppel South Central around Hoe Chiang Roadway in Tanjong Pagar.

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At the same time, Yeo anticipates that companies should close in this year with “mindful optimism,” given that geopolitical tensions present a substantial danger to company growth and procedures. He likewise expects inhabitance degrees to remain strict at quality office buildings that can regulate a premium, reared by Singapore’s low joblessness rate and the city-state’s placement as a premier operation location. Knight Frank estimates rental fees to expand reasonably in between 1% and 3% in 2024.

However, he believes office space leas may straighten out in 2H2024 as technology companies and worldwide financial institutions lay off team and settle service functions, which could bring about parts of workplace being moved back upon contract expiry.

Yeo indicates that the need for prime office spaces stays steep because Singapore remains to appeal to global companies. This is due to the vast pool of expertise, tax obligation incentives, a diversified market and modern-day facilities.