Singapore office rents fall in 3Q2023 on weaker demand: JLL
Tay Huey Ying, JLL Singapore’s head of study as well as consultancy, acknowledges, adding that office lease adjustment came to be much more prevalent this previous quarter. “Our evaluation shows that more than 15 assets commanded lower hires in 3Q2023 than in 2Q2023, which grabbed down the standard rents for CBD Level A space for the very first time since they turned around in 2Q2021.”
Singapore office rents dropped in 3Q2023, according to data disclosed by JLL in a Sept 25 news release. The consultancy adds in that it observes the initial quarterly downturn following nine continuous quarters of office space rental development in the city-state.
She expects descending force on workplace leas to intensify, with rents fixing further in the coming months amidst the existing macroeconomic atmosphere and incoming workplace supply. “Against the backdrop of an influx of upcoming ventures fighting for a very little pool of occupants, the temporary balance of office could end up being more noticable,” she adds.
He associates the lower rents to extra supply from office supply being gone back to the market “at an escalating rate” as more tenants right-size upon rent renewal to take care of costs.
JLL’s research presents that gross efficient rent for Level A workplace in the CBD dropped 0.3% q-o-q to an average of $11.29 psf monthly in 3Q2023, below $11.32 psf per month in 2Q2023.
The decline originates from recurring economic pressures, states Andrew Tangye, head of office space leasing and also advisory for JLL Singapore. “The unclear near-term outlook stemming from a mixture of slowing down economic development, geopolitical stress and increasing rates have actually continued to keep occupiers careful and even cost-conscious, leading to weaker workplace take-up,” he includes.
3 office ventures are set up for completion in the CBD over the following 24 months– IOI Central Blvd Towers (1.3 million sq ft) along with 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 approximated to be still unaffiliated.
Past the short-term headwinds, the medium-term overview for Singapore’s Level A CBD office renting market remains brilliant, JLL opines. Need will certainly be upheld by Singapore’s burgeoning reputation as an international hub, while the supply of workplace in the CBD will certainly remain constrained by a shortage of greenfield locations along with URA’s emphasis on injecting even more live and play spots downtown.