Office Rents In Raffles Place, Marina Bay Up 5.1% In Q3
SINGAPORE – Knight Frank said prime grade office rents in the Raffles Place / Marina Bay precinct grew by 0.8 percent quarter-on-quarter and 5.1 percent year-on-year during the third quarter to reach an average rate of S$11.05 per sq ft per month, according to the latest report published by the property consultancy on Thursday afternoon (19 October, SGT).
Singapore’s “slowing economy did not deter office rents from holding up, with prime office rents growing a moderate 3.4 percent in the first nine months of 2023,” Knight Frank stated in its report. For the entirety of the year, the real estate consultancy expects office occupancy levels to hold steady with a very marginal rental upside. Knight Frank also maintained its office rental growth forecast of 3 percent to 5 percent for the whole of 2023, as office supply in Singapore’s central business district will continue to remain tight.
In the third quarter, office occupancy rates in the overall CBD remained healthy at 94.4 percent from 94.1 percent in Q2, likewise for the Raffles Place / Marina Bay precinct at 96.0 percent from 95.8 percent previously.
Knight Frank revealed that during the period under review most tenants in quality office buildings in the CBD were generally more inclined to renew their office leases as it was more cost effective than relocating.
“The third quarter was a relatively quiet one for the office market as businesses around the world turned cautious, reticent to expand amid the bearish global economic outlook. Some international banks such as UBS and Standard Chartered recently announced reductions in headcounts,” noted the property consultancy.
Nonetheless, some smaller global and regional banks have been seeking a modest expansion of their office spaces. Also, some international companies were not deterred against opening an office in Singapore to have a presence in Southeast Asia. These included Japanese firm Exeo Global and Deel, a multinational human resource company based in San Francisco. They cited Singapore’s strategic location to Asia Pacific markets and the city’s significant talent pool as positive factors for establishing their new office here.