Prime office rents holding up despite slowing economy: Knight Frank

Occupancy levels in the Raffles Place and Marina Bay precinct along with the overall CBD remained resilient in the third quarter of 2023, clocking in at 96% and 94.4% respectively. Knight Frank Singapore reports that this is despite the slowing economy. Most office occupiers in quality office buildings in the CBD were inclined to renew their rental contracts due to the more cost-efficient option of not relocating.

The future development, Tampines Ave 11 Condo UOL Group, will be easily accessible and within walking distance to the Tampines West MRT Station. The development is a boon for the local community as it offers a multitude of living and entertainment opportunities conveniently located within the same premises.Residents of Tampines Ave 11 Condo UOL Group can also look forward to significant savings with the integrated bus interchange and hawker centre. With an expected completion date of 2025, the development provides unparalleled living opportunities for the residents of Tampines.

Prime grade office rents in the Raffles Place and Marina Bay precinct rose 0.8% quarter-on-quarter, to average at $11.05 psf per month. Overall, prime office rents for 2023 saw a moderate 3.4% growth in the first nine months of the year.

The report from Knight Frank highlights that, despite larger international banks such as UBS and Standard Chartered announcing reductions in headcounts, a number of banks have been searching for modest expansion space. International firms continue to set up locations in Singapore, with companies such as San Francisco-based global human resource firm Deel and Japanese firm Exeo Global opening regional offices here.

Looking ahead, prime office rents are expected to hold steady in the remaining months of the year, largely due to the lack of new office inventory expected to complete in the CBD until 2024. However, Knight Frank is maintaining its projection for office rents to grow between 3% to 5% for the whole year.

The forecast is supported by a relatively stable labour market, with a survey by the Manpower Group indicating 48% of respondents expecting to increase headcount in the next few quarters. “Undergirded by a tight labour market, office tenants continue to cautiously take holding positions by renewing or relocating their leases,” says Calvin Yeo, managing director, occupier strategy and solutions at Knight Frank Singapore.