Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Prime office space rents in the Raffles Place and Marina Bay precinct went up to around $11.20 psf per month (pm) in 1Q2024, a 0.6% raise q-o-q, according to a record by Knight Frank Singapore released on March 25.
Nonetheless, he believes workplace leas may flatten out in 2H2024 as tech companies and worldwide financial institutions lay off workers and combine organization affairs, which might cause parts of office being reverted upon rent expiration.
The rent buildup was supported by renewals, maintaining occupancy status tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the overall CBD. Calvin Yeo, running executive of tenant strategy and solutions at Knight Frank Singapore, adds that the revivals were completed at slightly higher rental fees as business opted to hold instead of relocating or expanding to avoid capital investment.
Yeo indicates that the demand for prime office stays steep because Singapore remains to attract multinational corporations. This results from the large pool of skill, tax benefits, a diversified overall economy and contemporary facilities.
A new source of prime offices is also anticipated to be completed this year, raising the existing amount. This includes IOI Central Boulevard Towers at 2 Central Blvd, which is anticipated to generate 1.26 million sq ft of office, and 33-storey Keppel South Central throughout Hoe Chiang Road in Tanjong Pagar.
Meanwhile, Yeo expects that businesses need to close in this year with “careful positive outlook,” given that geopolitical stress position a significant threat to service growth and procedures. He additionally expects tenancy degrees to stay strict at quality office complex that can command a premium, supported by Singapore’s low unemployment level and the city-state’s placement as a premier business place. Knight Frank estimates rental fees to increase moderately in between 1% and 3% in 2024.
