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

A new source of prime business offices is even expected to be completed this year, boosting the occurring supply. This consists of IOI Central Blvd Towers at 2 Central Blvd, that is expected to generate 1.26 million sq ft of workplace, and 33-storey Keppel South Central along Hoe Chiang Road in Tanjong Pagar.

The rental fee buildup was sustained by resumptions, maintaining occupancy status tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, supervising executive of occupant approach and answers at Knight Frank Singapore, adds in that the renewals were completed at slightly higher rental fees as companies preferred to stay put instead of moving or widening to stay away from capital expenditure.

Lakegarden Residences floor plan

Meanwhile, Yeo expects that businesses must approach this year with “mindful positive outlook,” given that geopolitical tensions present a substantial threat to service growth and operations. He additionally anticipates tenancy levels to stay tight at superior office complex that can regulate a premium, backed by Singapore’s low jobless level and the city-state’s setting as a premier company spot. Knight Frank estimates leas to expand reasonably between 1% and 3% in 2024.

Yeo mentions that the demand for prime office spaces remains steep due to the fact that Singapore continues to attract global firms. This results from the large pool of talent, tax obligation benefits, a varied economy and contemporary framework.

Nonetheless, he believes workplace leas may flatten out in 2H2024 as technology firms and worldwide banks lay off workers and settle service affairs, which might cause sections of workplace being returned upon rent expiration.

Prime office space leas in the Raffles Area and Marina Bay district rose to around $11.20 psf per month (pm) in 1Q2024, a 0.6% increase q-o-q, according to a report by Knight Frank Singapore released on March 25.