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

The rental fee growth was supported by resumptions, maintaining term status close at 95.6% for the Raffles Place and Marina Bay precinct and 94.7% for the total CBD. Calvin Yeo, managing director of tenant approach and solutions at Knight Frank Singapore, includes that the renewals were done at a little greater rents as business decided to hold instead of relocating or developing to avoid capital expenditure.

Nevertheless, he believes office leas may straighten out in 2H2024 as technology firms and worldwide banks lay off workers and consolidate business operations, which might lead to portions of office being returned upon lease expiration.

A brand-new source of prime business is also expected to be completed this year, increasing the occurring amount. This includes IOI Central Boulevard Towers at 2 Central Boulevard, that is expected to generate 1.26 million sq ft of office, and 33-storey Keppel South Central around Hoe Chiang Road in Tanjong Pagar.

On the other hand, Yeo expects that companies need to close in this year with “mindful positive outlook,” considered that geopolitical stress pose a substantial danger to organization growth and operations. He additionally anticipates tenancy levels to continue to be firm at top-notch office complex that can control a premium, backed by Singapore’s small jobless level and the city-state’s position as a premier business enterprise area. Knight Frank estimates rental fees to grow moderately between 1% and 3% in 2024.

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Prime office space rental fees in the Raffles Place and Marina Bay district rose to approximately $11.20 psf per month (pm) in 1Q2024, a 0.6% increase q-o-q, according to a statement by Knight Frank Singapore launched on March 25.

Yeo mentions that the demand for prime office stays high because Singapore remains to appeal to global companies. This results from the wide pool of talent, tax incentives, a varied economy and contemporary framework.

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