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

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

The rental fee increase was sustained by renewals, maintaining term levels tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the general CBD. Calvin Yeo, running director of occupant strategy and answers at Knight Frank Singapore, adds in that the revivals were accomplished at slightly higher rents as business opted to stay put as opposed to transferring or expanding to avoid capital expenditure.

Meanwhile, Yeo expects that businesses need to close in this year with “careful positive outlook,” given that geopolitical stress cause a substantial threat to company development and procedures. He likewise anticipates tenancy levels to stay firm at quality office buildings that can command a premium, supported by Singapore’s minimal joblessness rate and the city-state’s placement as a premier company spot. Knight Frank approximates rental fees to expand reasonably between 1% and 3% in 2024.

However, he believes workplace rents might straighten out in 2H2024 as technology firms and worldwide financial institutions lay off workers and consolidate service affairs, which might cause parts of office space being reverted upon contract expiry.

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Yeo indicates that the demand for prime workplace continues to be steep since Singapore continues to attract international firms. This is because of the broad pool of expertise, tax obligation rewards, a diversified overall economy and modern infrastructure.

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