Singapore office rents fall in 3Q2023 on weaker demand: JLL

Tay Huey Ying, JLL Singapore’s head of research study as well as consultancy, concords, putting in that workplace rent adjustment became a lot more extensive this past quarter. “Our analysis reveals that more than 15 assets commanded lesser hires in 3Q2023 than in 2Q2023, which grabbed down the average leas for CBD Grade A space for the very first time since they reversed in 2Q2021.”

Singapore office space rental fees dropped in 3Q2023, according to data disclosed by JLL in a Sept 25 press release. The consultancy includes that it denotes the first quarterly downtrend following 9 constant quarters of office space rental growth in the city-state.

She expects downward strain on workplace rents to heighten, with leas fixing further in the coming months amid the existing macroeconomic environment and incoming office supply. “Opposing the backdrop of an influx of upcoming ventures fighting for a small pool of lessees, the short-term balance of workplace could end up being more noticable,” she adds.

He connects the lesser leas to much more supply from office stock being gone back to the marketplace “at an escalating rate” as even more occupiers right-size upon rental renewal to handle prices.

JLL’s analysis reveals that gross efficient rent for Level An office in the CBD fell 0.3% q-o-q to an average of $11.29 psf each month in 3Q2023, below $11.32 psf each month in 2Q2023.

The decrease comes from continuous economic pressures, claims Andrew Tangye, head of workplace leasing and advisory for JLL Singapore. “The unclear near-term forecast coming from a combination of slowing financial growth, geopolitical tensions and rising rates have actually remained to keep occupiers wary and cost-conscious, leading to weak office take-up,” he adds.

3 workplace projects are arranged for finalization in the CBD over the next 24 months– IOI Central Boulevard 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 early 2025. JLL states that to date, over 1.5 million sq ft is estimated to be still uninvolved.

Kassia Condo Singapore

Past the short-term headwinds, the medium-term outlook for Singapore’s Level A CBD office renting market remains bright, JLL says. Demand will be supported by Singapore’s expanding credibility as a global center, while the supply of office space in the CBD will stay constricted by a scarcity of greenfield locations together with URA’s focus on adding more live and play places downtown.

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