Singapore office rents fall in 3Q2023 on weaker demand: JLL
Three workplace jobs are arranged for completion in the CBD over the next 24 months– IOI Central Boulevard Towers (1.3 million sq ft) and also 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 predicted to be still uncommitted.
She expects downward pressure on workplace rents to escalate, with rents dealing with further in the coming months amidst the existing macroeconomic atmosphere and also arriving workplace supply. “Against the backdrop of an increase of future undertakings competing for a limited pool of occupants, the short-term balance of office can become more noticable,” she adds.
The decrease originates from ongoing economic pressures, says Andrew Tangye, head of workplace leasing and also advisory for JLL Singapore. “The uncertain near-term forecast originating from a combination of slowing economic development, geopolitical tensions and rising costs have continued to keep occupiers cautious plus cost-conscious, leading to weaker office space take-up,” he includes.
JLL’s research reveals that gross reliable rent for Grade A workplace in the CBD slipped 0.3% q-o-q to around $11.29 psf monthly in 3Q2023, below $11.32 psf each month in 2Q2023.
Past the temporary headwinds, the medium-term expectation for Singapore’s Level A CBD workplace renting out market remains rich, JLL says. Demand will certainly be sustained by Singapore’s growing reputation as an international hub, while the supply of office in the CBD will remain constricted by a lack of greenfield sites together with URA’s emphasis on adding even more live and play spots downtown.
He associates the lesser hires to more supply from office space supply being actually gone back to the market “at a raising rate” as more tenants right-size upon rent renewal to manage expenses.
Singapore office leas decreased in 3Q2023, according to information disclosed by JLL in a Sept 25 news release. The consultancy adds that it denotes the first quarterly downturn following 9 consecutive quarters of office space rental growth in the city-state.
Tay Huey Ying, JLL Singapore’s head of study as well as consultancy, recognizes, putting in that workplace rent improvement came to be a lot more extensive this past quarter. “Our analysis displays that greater than 15 investments commanded reduced rents in 3Q2023 than in 2Q2023, which dragged down the standard hires for CBD Level A space for the very first time ever since they reversed in 2Q2021.”