Singapore Office Rents Poised To Rebound To Pre-COVID Levels

Office Finder Team

August 22, 2022

Singapore

SINGAPORE – Office rents in the city-state are set to recover to ranges seen before the COVID-19 pandemic, as more Chinese companies rush to expand operations in the Asian financial hub, reported The Financial Times on Monday morning (22 August, SGT).

The return of staff to their workplaces over the past 12 months as well as the lockdowns in China and Hong Kong have urged global companies there to seek other markets where they can operate and lease office space, and one of those attractive places to relocate to is Singapore. This has resulted in office rents in the city-state’s central business district (CBD) increasing to S$10.74 psf in Q2 2022, based on data from property consultancy Jones Lang LaSalle (JLL).

Compared to Q1 2022, Singapore office rents edged up by 2.7 percent. This means commercial property owners here recorded five straight quarters of office rental growth, and the local office market has outperformed Asian rivals, such as Tokyo and Hong Kong.

In addition, the figure for Q2 is merely 0.6 percent shy of the S$10.81 psf witnessed at the end of 2019.

“Our forecast is that it will hit S$11 by the end of the year and rise another 25 percent by 2026,” said JLL’s Head of strategic advisory for Asian capital markets enterprise, Regina Lim.

Singapore’s impartiality and excellent business environment has become sought-after by multinational companies, amidst geopolitical tensions between the United States and China.

“If it continues like this we will see even more (firms expanding in Singapore)” added Calvin Yeo, head of office advisory at Knight Frank Singapore.

This trend has pushed up commercial property investments in Singapore, which soared 74 percent to US$5.6 billion in Q2 2022 compared to the same period a year ago, according to statistics from MSCI.

“For the first half of this year there was definitely a strong sense that corporates wanted to grow here, but with the recent correction I would be a little more cautious about aggressive expansion,” added JLL’s Lim.