Singapore office rents fall in 3Q2023 on weaker demand: JLL
Tay Huey Ying, JLL Singapore’s head of study and also consultancy, concords, adding that office rent improvement came to be much more widespread this previous quarter. “Our study reveals that greater than 15 assets commanded lower rents in 3Q2023 than in 2Q2023, which dragged down the average rents for CBD Level A space for the very first time ever since they turned around in 2Q2021.”
She prepares for descending strain on office rents to escalate, with rents fixing even more in the coming months amidst the present macroeconomic environment as well as arriving office supply. “Against the backdrop of an influx of upcoming projects competing for a very little pool of tenants, the short-term balance of office could become more noticable,” she adds.
JLL’s research study shows that gross effective rent for Grade A workplace in the CBD dropped 0.3% q-o-q to around $11.29 psf each month in 3Q2023, down from $11.32 psf monthly in 2Q2023.
He connects the lesser hires to a lot more supply from office space supply being gone back to the marketplace “at an increasing rate” as even more occupants right-size upon lease renewal to manage expenses.
Singapore office space rents decreased in 3Q2023, according to data disclosed by JLL in a Sept 25 announcement. The consultancy includes that it observes the first quarterly downtrend following nine consecutive quarters of office space rental growth in the city-state.
The decrease comes from continuous economic forces, states Andrew Tangye, head of office space leasing and advisory for JLL Singapore. “The uncertain near-term outlook originating from a mixture of slowing economic development, geopolitical tensions and rising costs have continued to keep occupants cautious plus cost-conscious, resulting in weak office space take-up,” he includes.
3 workplace jobs are scheduled for conclusion in the CBD over the following 24 months– IOI Central Blvd Towers (1.3 million sq ft) and also Keppel South Central (0.6 million sq ft) in 2024, and the redeveloped Shaw Tower (0.4 million sq ft) in early 2025. JLL states that to date, over 1.5 million sq ft is estimated to be still unaffiliated.
Beyond the short-term headwinds, the medium-term outlook for Singapore’s Level A CBD office renting out market stays rich, JLL suggests. Demand will certainly be upheld by Singapore’s blossoming credibility as a global hub, while the supply of workplace in the CBD will stay constricted by a shortage of greenfield sites along with URA’s focus on adding more live and play places downtown.
