Singapore CBD Office Rents Rise

Singapore CBD Office Rents Rise For 6 Straight Quarters

SINGAPORE – Data from Jones Lang LaSalle (JLL) showed that rents of investment-grade office properties found in the city-state’s central business district (CBD) continued to increase for the 6th straight quarter in Q3 2022 amid lower office vacancy levels, according to its latest Property Market Monitor that was published on Monday (17 October, SGT).

In Q3 2022, gross effective rents of such office assets rose 2.9 percent quarter-on-quarter to S$11.06 psf per month. Consequently, Singapore CBD office rents are currently at their highest level since the fourth quarter of 2008.

“Supported by the tailwind of Singapore’s economic re-opening, leasing activities remained healthy in 3Q22 despite growing concerns over a global economic slowdown,” said the real estate consultancy.

At the same time, the selling prices or capital values of Singapore CBD offices edged up by 0.2 percent quarter-on-quarter to S$3,277 psf.

“Capital value growth of investment-grade offices decelerated to a near halt in Q3 2022 as real estate investors turned selective and cautious amid economic headwinds and soaring interest rates,” JLL noted.

Aside from that, the real estate consultancy revealed that the present supply of CBD investment-grade offices reached 32.2 million sq ft during the 3rd quarter.

The most expensive office transaction during the period under review was the S$1 billion sale of a 100 percent stake at Income at Raffles. The 2nd top office deal in Q3 was the disposal of a strata office unit at Samsung Hub for S$53.1 million, while the 3rd largest office transaction was the divestment of an entire strata office floor at level 31 of Suntec City Tower 2 for S$41.14 million.

But looking ahead, JLL said the gloomy economic outlook would cool Singapore’s office sector in the next 12 months.

“Nonetheless, investors still view Singapore as a safe haven and remain keen on premium commercial acquisition opportunities on the back of the long-term value proposition of Singapore’s office assets,” it added.

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