Singapore CBD Office Market Returns To Life
SINGAPORE – After over two years of COVID-induced doldrums, the office market in the city-state’s central business district (CBD) has returned to some pre-pandemic semblance, with office space demand recovering significantly, according to a commentary from Jones Lang LaSalle (JLL) that was published on ChannelNewsAsia on Tuesday morning (6 September, SGT).
This comes after the Singapore government allowed 100 percent of employees to work in the office in April 2022 and further eased COVID-related restrictions.
In fact, net office absorption reached a 17-quarter high in Q2 2022, while office vacancy level fell to 6.8 percent at the end of June from the pandemic-high of 9.6 percent in Q3 2021.
“It might sound surprising at first since hybrid working is expected to be the new norm. But of course, working a few days from home still means the rest of the week in the office for many,” wrote Tay Huey Ying, Head of Research and Consultancy at JLL Singapore.
Moreover, the office downsizing trend has slowed down. Some tenants are understood to have abandoned or are re-evaluating plans to slash office space, as they expect a potential squeeze as more staff return to their workplace.
On the other hand, other occupiers have expanded to prepare for business growth due to improving economic activities. For instance, Blackstone is understood to be doubling its office space to 36,000 sq ft when it relocates within Marina Bay Financial Centre (MBFC), while online trading and investment specialist Saxo Markets’ new office in CapitaSpring is reportedly 15 percent bigger than its prior workspace.
Notably, CapitaSpring recorded a 93 percent leasing commitment rate by the time it obtained its Temporary Occupation Permit (TOP) at the end of 2021, while pre-commitment rates at Guoco Midtown and IOI Central Boulevard Towers, which are slated for completion in 2022 and 2023, respectively, are steadily increasing.
In March, Sony Music officially opened its new regional headquarters at Duo Tower.
Meanwhile, demand for coworking space has recovered. It was reported that enquiries for JustCo’s flex office across Singapore jumped by over 40 percent quarter-on-quarter in Q1 2022, with the firm seeing a spike right after the relaxation of some COVID curbs in March.
Amidst improving demand, JustCo intends to open a new coworking outlet at International Plaza in early-2023, while rival WeWork started opening its largest coworking centre in the region in phases from July 2022.