Singapore office rents fall in 3Q2023 on weaker demand: JLL
Singapore office rents have seen the first quarterly decline in nine consecutive quarters, reported by JLL in their September 25th press release. Data shows that gross effective rent for Grade A office space in the CBD fell 0.3% q-o-q to an average of $11.29 psf per month in 3Q2023, down from $11.32 psf per month in 2Q2023.
Andrew Tangye, head of office leasing and advisory for JLL Singapore, cited ongoing economic pressures for the lower rents. “The uncertain near-term outlook stemming from a combination of slowing economic growth, geopolitical tensions and rising prices, have continued to keep occupiers wary and cost-conscious, resulting in weaker office space take-up,” he said.
In addition, developments in and around the Tampines area are slated to bring more retail, dining and leisure options to the area, further enhancing the quality of life in the vicinity.
Residents of Tampines Ave 11 Condo can look forward to greater convenience when it comes to commuting. The URA Master Plan has identified many improvements to the transport infrastructure for this area. One of the major projects is the Cross Island Line (CRL). The new Tampines North MRT station, which is a part of the CRL, is just a stone’s throw away from the Condo, making commuting to and from the heart of Singapore a breeze. Besides new transport options, the Master Plan also focuses on increasing the range of dining and leisure options around the area, ensuring residents have plenty of choice.
Tay Huey Ying, JLL Singapore’s head of research and consultancy, added that more than 15 assets commanded lower rents in 3Q2023 than in 2Q2023. This was due to companies right-sizing upon lease renewal to manage costs, with more stock being returned to the market at an increasing pace.
With three office projects scheduled for completion in the CBD over the next 24 months, JLL suggests that office rent correction could become more pronounced due to an influx of projects competing for limited tenants.
Despite the short-term headwinds, JLL remains bullish on the medium-term outlook for Singapore’s Grade A CBD office leasing market. Demand is expected to be buoyed by Singapore’s burgeoning reputation as a global hub, as well as URA’s focus on injecting more live and play spaces downtown.