Office Market Outside Of Singapore’s CBD Remains Challenging

SINGAPORE – While take-up of office space within the city-state’s central business district (CBD) is improving, the leasing environment for office buildings outside of this prime area is not as rosy, reported The Business Times on Wednesday afternoon (27 July, SGT).

Within Singapore’s CBD, the demand for office space is sizzling hot. In fact, Keppel REIT’s manager announced in a briefing on Tuesday (26 July) that its recent office lease signings ranged from high S$9 to mid S$13 psf per month.

Aside from that, pending office lease signings have exceeded S$15 psf per month and this has made Keppel REIT’s manager more confident that the uptrend will continue over the coming quarters, said Rodney Yeo, Head of asset management at Keppel REIT’s manager.

On the other hand, Frasers Centrepoint Trust revealed on Wednesday that the situation of the office market outside of Singapore’s CBD is not as upbeat, with rising office rents not yet being witnessed in city-fringe locations.

The office leasing environment for city-fringe locations “remains challenging,” said Pauline Lim, the REIT manager’s Head of investment and asset management. He was speaking at a briefing to analysts and reporters regarding Frasers Centrepoint Trust’s business updates for the third quarter ended 30 June 2022.

“We do see improvements in rents in the prime CBD office space. That was driven by both demand and supply… but it hasn’t really cascaded to the CBD fringe locations as yet.”

FCT’s commercial property portfolio predominantly comprises shopping malls, but it also holds Central Plaza, a 20-storey office tower in Tiong Bahru where an anchor tenant had surrendered three office floors.

Frasers Centrepoint Trust’s manager is now considering to subdivide one of the vacated office floors, as it works to conclude negotiations for renting out the other two floors, added Lim.