Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank
Yeo mentions that the need for prime office continues to be steep due to the fact that Singapore remains to appeal to multinational corporations. This is because of the vast pool of capability, tax obligation incentives, a varied market and modern-day infrastructure.
The rent growth was supported by resumptions, retaining tenancy levels close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, managing director of occupant strategy and answers at Knight Frank Singapore, adds that the renewals were done at a little greater rents as companies preferred to remain rather than relocating or broadening to avoid capital investment.
However, he believes office leas might flatten out in 2H2024 as tech companies and worldwide banks lay off staff and combine service functions, which can result in sections of office being returned upon lease expiry.
A new supply of prime business is also expected to be completed this year, boosting the existing amount. This includes IOI Central Blvd Towers at 2 Central Boulevard, that is expected to bring in 1.26 million sq ft of workplace, and 33-storey Keppel South Central along Hoe Chiang Road in Tanjong Pagar.
On the other hand, Yeo prepares for that companies must close in this year with “cautious confidence,” given that geopolitical tensions pose a substantial threat to business growth and operations. He likewise expects occupancy degrees to remain firm at quality office complex that can regulate a premium, backed by Singapore’s low lack of employment level and the city-state’s setting as a premier company spot. Knight Frank estimates rents to expand reasonably in between 1% and 3% in 2024.
Prime office space rents in the Raffles Area and Marina Bay district went up to around $11.20 psf per month (pm) in 1Q2024, a 0.6% raise q-o-q, according to a report by Knight Frank Singapore launched on March 25.
