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

Prime business leas in the Raffles Place and Marina Bay precinct rose to approximately $11.20 psf per month (pm) in 1Q2024, a 0.6% surge q-o-q, according to a statement by Knight Frank Singapore released on March 25.

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The rent growth was sustained by resumptions, maintaining term 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 approach and answers at Knight Frank Singapore, adds that the revivals were completed at slightly higher rental fees as business preferred to stay put rather than moving or broadening to avoid capital expenditure.

Yeo notes that the need for prime office spaces continues to be steep due to the fact that Singapore continues to attract international companies. This results from the large pool of skill, tax benefits, a diversified economy and modern framework.

Meanwhile, Yeo expects that organizations must approach this year with “cautious optimism,” given that geopolitical tensions pose a significant risk to business growth and procedures. He likewise expects tenancy levels to remain tight at top-notch office complex that can control a premium, backed by Singapore’s small unemployment level and the city-state’s setting as a premier operation location. Knight Frank estimates rents to increase reasonably between 1% and 3% in 2024.

However, he believes workplace rents might smooth out in 2H2024 as tech companies and worldwide banks lay off team and consolidate business affairs, which can cause sections of office being moved back upon rent expiry.

A brand-new source of prime business is also anticipated to be finished this year, raising the presenting supply. This includes IOI Central Boulevard Towers at 2 Central Boulevard, which is expected to generate 1.26 million sq ft of workplace, and 33-storey Keppel South Central throughout Hoe Chiang Road in Tanjong Pagar.

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