Prime office rents up 0.6% q-o-q in 1Q2024: Knight Frank

Prime office rents in the Raffles Place and Marina Bay district increased to an average of $11.20 psf per month (pm) in 1Q2024, a 0.6% surge q-o-q, according to a report by Knight Frank Singapore released on March 25.

At the same time, Yeo expects that companies must approach this year with “mindful optimism,” considered that geopolitical tensions position a significant threat to business growth and operations. He also anticipates occupancy levels to remain strict at quality office buildings that can regulate a premium, backed by Singapore’s small lack of employment rate and the city-state’s position as a premier business area. Knight Frank approximates rents to expand reasonably in between 1% and 3% in 2024.

The rent buildup was sustained by resumptions, retaining term status tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, running director of occupier strategy and services at Knight Frank Singapore, adds that the renewals were accomplished at slightly greater rental fees as companies opted to remain as opposed to moving or widening to avoid capital investment.

Nonetheless, he thinks office space rents might flatten out in 2H2024 as technology firms and global banks lay off team and settle business functions, which can cause portions of workplace being reverted upon rent expiration.

Yeo indicates that the need for prime office remains high due to the fact that Singapore remains to appeal to multinational companies. This is because of the vast pool of expertise, tax obligation incentives, a diversified economy and contemporary facilities.

A new supply of prime offices is also expected to be completed this year, increasing the presenting amount. This includes IOI Central Blvd Towers at 2 Central Boulevard, which is expected to generate 1.26 million sq ft of office space, and 33-storey Keppel South Central along Hoe Chiang Roadway in Tanjong Pagar.

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