AEW Anticipates Continued Uptrend In Singapore Office Rents
SINGAPORE – Fund manager AEW’s Head of investments here Adrian Lee revealed that they expect Singapore’s office market to undergo a “multi-year rental upcycle” supported by trends like relocations to the city-state, expansions in companies’ regional headquarters here, and the limited office stock, reported Mingtiandi on Tuesday evening (25 October, SGT).
“CBD rents are definitely going up. That’s where we see opportunities to consider taking a bit of leasing risks in terms of our investments. We will probably partner up with developers to take on some of these redevelopment or refurbishment projects,” stated Lee during the recent Mingtiandi Singapore Forum.
Even though property investments fell for the 2nd straight quarter in Q3 2022, rents of Singapore Grade A offices edged up by 1.8 percent quarter-on-quarter during the said period, as firms vie for prime office space in the global financial hub, based on a report from real estate consultancy Cushman & Wakefield (C&W).
In fact, there’s a huge inflow of talent into Singapore as indicated by rising residential rents and the dwindling slots at international schools, noted Savills Singapore’s Managing Director of investment sales Jeremy Lake.
He shared that although very few firms have publicly announced employee transfers to Singapore from places such as Hong Kong, many staff have voluntarily opted to relocated to Singapore in many cases.
Moreover, technology companies continue to expand, with Amazon agreeing to lease 369,000 sq ft at IOI Central Boulevard Towers, while ByteDance has further expanded in Singapore’s central business district (CBD).
Another factor propelling office take-up in Singapore is a preference for working from the office like in other Asian countries, said KKR’s property team Principal Jeremy Chee.
Living space per person here is about 33 percent lower than in Australia or the United States, which makes working from home less appealing. Singapore’s small size and efficient public transport system also makes it easy to commute to the office, and corporate cultures encourage staff to interact face-to-face, he explained.
“We’re not sure how working from the office will be since the dust has not settled. But we see some good momentum and expect it to stay,” he added.