Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Prime business rental fees in the Raffles Area and Marina Bay district rose to an average of $11.20 psf each month (pm) in 1Q2024, a 0.6% increase q-o-q, according to a record by Knight Frank Singapore published on March 25.
Yeo notes that the interest for prime office stays high due to the fact that Singapore continues to entice international corporations. This is because of the broad pool of talent, tax obligation benefits, a varied overall economy and modern-day infrastructure.
At the same time, Yeo expects that businesses should approach this year with “cautious positive outlook,” considered that geopolitical stress cause a significant threat to service growth and procedures. He also assumes tenancy degrees to remain tight at quality office buildings that can command a premium, backed by Singapore’s small jobless rate and the city-state’s setting as a premier business enterprise location. Knight Frank approximates rents to grow reasonably between 1% and 3% in 2024.
The rental fee buildup was supported by renewals, keeping tenancy levels close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the overall CBD. Calvin Yeo, managing director of occupier strategy and solutions at Knight Frank Singapore, adds in that the revivals were completed at a little higher leas as companies opted to stay put instead of relocating or broadening to stay away from capital investment.
However, he thinks office space rents may straighten out in 2H2024 as technology firms and global banks lay off team and settle organization functions, which can bring about sections of workplace being returned upon lease expiration.
A brand-new supply of prime office spaces is also expected to be completed this year, increasing the occurring supply. This consists of IOI Central Boulevard Towers at 2 Central Boulevard, which is expected to produce 1.26 million sq ft of workplace, and 33-storey Keppel South Central around Hoe Chiang Roadway in Tanjong Pagar.
