Office rents up 2.4% in 2Q2022 on return-to-office momentum
Leonard Tay, head of research study at Knight Frank Singapore, thinks that office rental fees will certainly hold firm regardless of a feasible economic crisis, backed by interest driven by the “flight to safety” to Singapore by exclusive affluent, corporates as well as MNCs. Knight Frank maintains a forecast of 3% to 5% growth in rental fees for the whole of 2022.
Catherin He, head of study, Singapore at Colliers, indicates that the rental development was broad-based, with mean rents of both Group 1 and also Classification 2 workplace increasing q-o-q by 0.9% and also 4% respectively. Based on a basket of office buildings tracked by Colliers Research, rents of the Core CBD Premium & Grade A sector increased by 1.8% from the preceding quarter to $11.10 psf per month.
Looking in advance, while the return-to-office force will continue thrusting the workplace leasing market, there are indications that worldwide economic headwinds are beginning to impact some occupiers’ realty decisions, which could toughen up workplace need in 2H2022, claims Tay Huey Ying, head of study as well as consultancy, Singapore at JLL.
The more powerful efficiency was underpinned by Singapore even more reducing workplace limitations, with 100% of staff members allowed to go back to the workplace since April 26.
The islandwide office vacancy rate reduced by 0.8 percent indicate 12%, driven by positive net absorption of 258,334 sq ft in 2Q2022. This marks a turnaround after five consecutive quarters of negative net absorption.
Nonetheless, she anticipates full-year growth for CBD Grade A gross reliable rental fees could still multiply the 4.3% clocked in 2021, given that they have currently risen by 5% in the very first half of the year.
“This good take-up was likely added by variation activity, in addition to new sets up in the legal part as well as non-bank financial institutions,” says Tricia Song, CBRE head of research study, Singapore and Southeast Asia. Song includes there was also a reduction of 473,612 sq ft in office stock, likely as a result of the elimination of AXA Tower as it started demolition works, which even more supported lower vacancy rates.
Lam Chern Woon, head of research study and consulting at Edmund Tie, emphasize that significant leasing task in 2Q2022 consists of Amazon.com’s reported take-up of 369,000 sq ft of area at the upcoming IOI Central Boulevard Towers as well as Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, doubling its office presence. The upcoming Guoco Midtown property likewise got grip in leasing event throughout the quarter, with tenants like ConocoPhillips as well as Swiss Re coming on board.
Workplace leas in the Central area expanded by 2.4% q-o-q in the 2nd quarter, according to information launched by URA on July 22. This is more than the 1.6% boost recorded in the previous quarter and registers a 3rd consecutive quarter of expansion.
