Office rents up 2.4% in 2Q2022 on return-to-office momentum

The islandwide workplace openings price decreased by 0.8 percentage points to 12%, driven by good net absorption of 258,334 sq ft in 2Q2022. This notes a reversal after five consecutive quarters of negative net absorption.

The more powerful efficiency was underpinned by Singapore better easing workplace constraints, with 100% of employees allowed to return to the office as April 26.

Leonard Tay, head of study at Knight Frank Singapore, believes that office rental fees will certainly hold firm despite a possible economic crisis, backed by need driven by the “flight to safety” to Singapore by exclusive wealthy, corporates and MNCs. Knight Frank preserves a projection of 3% to 5% growth in rents for the whole of 2022.

Nonetheless, she prepares for full-year success for CBD Grade A gross efficient rental fees can still increase the 4.3% clocked in 2021, given that they have actually currently increased by 5% in the first half of the year.

Catherin He, head of study, Singapore at Colliers, notes that the rental growth was broad-based, with average rental fees of both Classification 1 as well as Category 2 workplace boosting q-o-q by 0.9% and also 4% specifically. Based on a basket of office complex tracked by Colliers Study, rents of the Core CBD Premium & Grade A segment increased by 1.8% from the coming before quarter to $11.10 psf each month.

Workplace leas in the Central area grew by 2.4% q-o-q in the second quarter, according to information published by URA on July 22. This is greater than the 1.6% rise recorded in the previous quarter and also registers a 3rd consecutive quarter of progress.

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Looking ahead, while the return-to-office force will certainly carry on driving the workplace renting market, there are signs that global economic headwinds are opening to affect some inhabitants’ real estate choices, which can solidify workplace need in 2H2022, says Tay Huey Ying, head of study as well as consultancy, Singapore at JLL.

Lam Chern Woon, head of research and also consulting at Edmund Tie, emphasize that significant leasing activity in 2Q2022 includes’s reported take-up of 369,000 sq ft of space at the upcoming IOI Central Blvd Towers and Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, doubling its office presence. The upcoming Guoco Midtown development likewise gained traction in leasing act during the quarter, with occupants like ConocoPhillips and Swiss Re coming on board.

“This good take-up was likely helped by variation activity, along with new sets up in the legal part and non-bank financial institutions,” remarks Tricia Song, CBRE head of research, Singapore as well as Southeast Asia. Song includes there was also a loss of 473,612 sq ft in office stock, likely due to the elimination of AXA Tower as it started demolition jobs, which further sustained reduced vacancy rates.

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