Prime office rents rise 1.2% q-o-q in 1Q on the back of robust demand: Knight Frank
Prime office rents in the Raffles Place/Marina Bay precinct inched up 1.2% q-o-q to $10.25 psf per month (pm), extending the 1.7% growth in 2H2021, says a 1Q2022 office report by Knight Frank. This marks a third consecutive quarterly increase, recovering from its trough in the middle of last year.
“As the Covid-19 situation stabilises and more return to the office, the previously tenant-led leasing market will move towards more balance between landlords and tenants,” the report reads. Occupancy in the Raffles Place/Marina Bay precinct improved by 2.3% q-o-q to 94.1% in the first quarter, aided by the full leasing of CapitaSpring.
Pre-termination office space increased to around 226,000 sq ft in 1Q2022, as some banks continued to downsize, introducing some 147,000 sq ft of shadow space into the market. Nevertheless, these spaces are expected to be filled rapidly with the easing of Covid-19 restrictions in the workplace.
“Quality office space will become increasingly paramount, as employees now expect work environments to be more conductive than homes in order to induce a return to physical offices,” the report adds.
Knight Frank also views the recent URA restrictions on strata-subdivisions of commercial developments in the CBD as in line with the government’s push for “more world-class office spaces”, because single ownership will likely see better management of the buildings.
From a demand standpoint, Singapore offices are expected to capitalise on the geopolitical tensions in Hong Kong as well as the stringent Covid-19 measures there. Read More…
