Singapore office rents fall in 3Q2023 on weaker demand: JLL
The decline comes from continuous economic pressures, claims Andrew Tangye, head of office leasing as well as advisory for JLL Singapore. “The unsure near-term outlook coming from a mix of slowing down financial growth, geopolitical tensions and rising costs have actually continued to maintain tenants careful and even cost-conscious, leading to weak office take-up,” he includes.
He associates the lower leas to extra supply from office space stock being actually returned to sale “at a raising rate” as even more occupiers right-size upon rental renewal to manage expenses.
She prepares for descending pressure on workplace leas to intensify, with hires dealing with further in the coming months amid the present macroeconomic environment as well as incoming office supply. “Opposing the backdrop of an increase of coming ventures challenging for a very little pool of tenants, the temporary overrun of office might become a lot more noticable,” she includes.
Beyond the short-term headwinds, the medium-term outlook for Singapore’s Grade A CBD office space renting market remains rich, JLL opines. Interest will be sustained by Singapore’s growing reputation as a worldwide center, while the supply of office space in the CBD will certainly remain constrained by a lack of greenfield locations along with URA’s emphasis on injecting more live and play places downtown.
Singapore business office leas declined in 3Q2023, according to data reported by JLL in a Sept 25 news release. The consultancy adds that it denotes the very first quarterly downturn following 9 continuous quarters of office space rental growth in the city-state.
Three office jobs are arranged for conclusion in the CBD over the next 24 months– IOI Central Boulevard Towers (1.3 million sq ft) and Keppel South Central (0.6 million sq ft) in 2024, and also the redeveloped Shaw Tower (0.4 million sq ft) in very early 2025. JLL states that to date, over 1.5 million sq ft is estimated to be still uncommitted.
JLL’s research reveals that gross effective rent for Grade A workplace in the CBD slipped 0.3% q-o-q to approximately $11.29 psf per month in 3Q2023, below $11.32 psf per month in 2Q2023.
Tay Huey Ying, JLL Singapore’s head of research and also consultancy, concurs, adding that workplace rent correction came to be a lot more extensive this previous quarter. “Our study reveals that greater than 15 properties regulated reduced leas in 3Q2023 than in 2Q2023, which grabbed down the common rents for CBD Level A space for the first time ever since they shifted in 2Q2021.”