Prime Office Rents In Raffles Place / Marina Bay Up 1.4% In Q3
SINGAPORE – Rents of Prime Grade office space in Raffles Place / Marina Bay precinct edged up by 1.4 percent quarter-on-quarter to an average of S$10.51 psf per month. Cumulatively, office rents grew 5.3 percent during the 3rd quarter since it hit rock-bottom during the same period last year, according to Knight Frank’s Singapore Office Market Update Q3 2022 that was published on Wednesday noon (28 September, SGT).
“Due to the non-excessive supply of new office inventory coupled with increasing demand for prime space, market balance shifted to landlords providing support for the higher rents this quarter, said the property consultancy.
Moreover, occupancy levels in Raffles Place / Marina Bay remained healthy at 95.4 percent, exceeding the 93.6 percent overall office occupancy in Singapore’s CBD during the period under review.
“Many businesses are bringing employees back to the office as functions resume to pre-pandemic levels and as companies expand head count in the second half of the year to meet the operational needs of a normalising economy,” noted Knight Frank.
Amidst geopolitical tensions, the property consultancy said business service firms in the Asia Pacific (APAC) region are increasingly relocating their headquarters to Singapore.
“With Singapore identified as a key business node by many multinational corporations (MNCs) in a continued ‘flight to safety’, demand for office space was healthy as corporates sought the stability of the city-state for business continuity.”
Lured by the city-state’ political stability and sophisticated financial infrastructure, private equity companies and family offices as well as tech start-ups from Southeast Asian countries like Indonesia have established a presence in Singapore. For instance, TR Capital opened an office at CapitaGreen as the private equity company expanded its investment footprint in the ASEAN region.
With office occupancies steadily tightening and office rental activity to remain healthy for the rest of the year, Knight Frank has maintained its forecast that office rents in Singapore would increase by 3 percent to 5 percent for the whole of 2022, with the office sector increasingly becoming a landlord’s market going into 2023.