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

Yeo indicates that the demand for prime office spaces stays steep because Singapore remains to attract multinational companies. This is because of the wide pool of capability, tax benefits, a diversified economy and modern infrastructure.

The rental fee growth was sustained by resumptions, retaining tenancy status tight at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, supervising executive of occupant strategy and answers at Knight Frank Singapore, adds in that the renewals were done at slightly greater rents as firms decided to hold as opposed to transferring or developing to avoid capital expenditure.

Blossoms By The Park condominium

Prime office space leas in the Raffles Place and Marina Bay district rose to approximately $11.20 psf monthly (pm) in 1Q2024, a 0.6% increase q-o-q, according to a record by Knight Frank Singapore released on March 25.

A brand-new source of prime business offices is even anticipated to be finished this year, raising the remaining supply. This consists of IOI Central Boulevard Towers at 2 Central Boulevard, which is anticipated to bring in 1.26 million sq ft of office space, and 33-storey Keppel South Central throughout Hoe Chiang Road in Tanjong Pagar.

Meanwhile, Yeo anticipates that companies should close in this year with “careful optimism,” considered that geopolitical tensions cause a considerable danger to organization growth and operations. He also assumes tenancy levels to continue to be tight at top-notch office complex that can control a premium, supported by Singapore’s small joblessness rate and the city-state’s position as a premier operation venue. Knight Frank estimates rents to increase moderately between 1% and 3% in 2024.

Nevertheless, he believes office leas may smooth out in 2H2024 as tech firms and international financial institutions lay off workers and settle service functions, which might result in portions of office space being returned upon contract expiry.

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