Singapore Prime Office Rents Up 1.1% In Q2

Office Finder Team

July 19, 2022

Singapore

SINGAPORE – Rents of prime office properties in Raffles Place and Marina Bay continued to climb, rising 1.1 percent on a quarterly basis in Q2 2022 to reach an average rate of S$10.36 psf per month, according to a new report from Knight Frank that was published on Monday afternoon (18 July, SGT).

Apart from marking the 4th straight quarter of rental gains, this brought Singapore’s prime office rental growth to 2.3 percent for the first half of the year and 3.8 percent since office rents here hit rock-bottom in Q3 2021.

Moreover, office occupancy rates in Raffles Place and Marina Bay edged up by 1.5 percentage points during the second quarter to hit 95.4 percent amidst tight supply.

Knight Frank stated that demand for Singapore prime office space continued to be bolstered by a flight to safety by companies, private wealth, and multinational corporations in other parts of Asia that have been hit by harsh COVID-19 curbs.

“As a case-in-point, the number of family offices was reported to have more than doubled from 203 in 2020 to 453 in 2021, with about 143 new family offices set up in Singapore from January to April 2022, according to data from Handshakes,” noted the real estate consultancy.

While some tech fims like Crypto.com and Shopee have begun reducing headcount in Singapore due to declining valuations and rising inflation, other tech giants continue to show signs of expansion. For instance, Meta is in advanced negotiation to be an anchor tenant at the upcoming IOI Central Boulevard Towers, while Amazon is said to have agreed to occupy around 369,000 sq ft of office space there.

Looking ahead, Knight Frank expects Singapore office rents to increase from 3 percent to 5 percent for the entirety of 2022. The property consultancy said it thinks office rents here will be supported by sustained demand and the limited supply of good-quality office space in the next 6 months to 12 months. This is despite issues in the form of high inflation, rising interest rates, and supply chain disruptions.