Singapore CBD Office Rents Up 1% In Q1 2023
SINGAPORE – Gross effective rents of investment-grade office properties in the city-state’s central business district (CBD) edged up by 1 percent quarter-on-quarter to S$11.30 psf per month during the first three months of the year, according to Jones Lang LaSalle’s (JLL) latest Singapore Property Market Monitor.
“CBD investment-grade office rent growth decelerated for the second straight quarter as more landlords scaled back their aggressive rent stance to focus on filling vacancies,” said the real estate consultancy in its report.
At the same time, the capital values of investment-grade offices in Singapore’s CBD extended their fall during the first quarter of the year, dipping 1.5 percent quarter-on-quarter to S$3,189 psf based on net lettable area (NLA), weighed down by repricing pressure from the higher interest rates.
As of Q1 2023, the current office stock in the CBD stood at 32.9 million sq ft. However, net office absorption contracted during the period, as more businesses decided to rightsize their office space to enhance cost efficiency. Also, many companies, particularly large office space tenants, have put their expansion and relocation plans on hold to minimise capital expenditures.
“Ongoing economic headwinds will continue to dampen business confidence and office demand in the near-term. Competition for tenants will keep rent growth modest, while tight credit conditions will keep pressure on capital values,” added Jones Lang LaSalle.