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

The lease increase was supported by resumptions, keeping term status tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, running director of tenant strategy and services at Knight Frank Singapore, adds that the revivals were accomplished at slightly higher leas as companies chose to stay as opposed to transferring or widening to prevent capital expenditure.

Yeo mentions that the interest for prime office stays high due to the fact that Singapore remains to entice global corporations. This is because of the broad pool of capability, tax obligation incentives, a varied market and modern-day infrastructure.

Prime office rental fees in the Raffles Place and Marina Bay district increased to an average of $11.20 psf per month (pm) in 1Q2024, a 0.6% surge q-o-q, according to a record by Knight Frank Singapore launched on March 25.

Nonetheless, he thinks office space rents might straighten out in 2H2024 as tech companies and global financial institutions lay off team and settle business functions, which might bring about sections of office space being returned upon lease expiry.

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

Meanwhile, Yeo expects that businesses must approach this year with “careful optimism,” given that geopolitical stress cause a significant threat to business development and procedures. He additionally anticipates tenancy levels to remain firm at top-notch office complex that can command a premium, reared by Singapore’s low unemployment rate and the city-state’s placement as a premier business area. Knight Frank approximates rents to increase reasonably between 1% and 3% in 2024.

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