Underpinned by strong demand drivers, this also gives us much reason to believe that Singapore’s office rents will continue to make a good upward run in the near to medium-term, says Tay Huey Ying.
SINGAPORE (EDGEPROP) - Central Business District (CBD) Grade A office rents in Singapore rose by 1.5% q-o-q to $10.05 psf in 3Q2021. This follows a 1.2% q-o-q growth in the previous quarter that ended five straight quarters of rental declines, according to a market report by JLL.
Rental growth in 3Q2021 was broad-based across all four CBD sub-markets tracked by the consultancy.
The report entitled Singapore office rents: a long runway for growth says that Singapore’s CBD Grade A office rents are expected to stay on a growth trajectory over the next few years, and the market could record an increase of 25–30% by 2025.
“As we expect the government to focus on developing suburban hubs to bring jobs closer to homes, there is likely to be little or no office land releases in the CBD in the short to medium term,” says Tay Huey Ying, head of research and consultancy, JLL Singapore.
The upcoming Guoco Midtown and Central Boulevard Towers could be the last fresh injection of office supply on greenfield sites in the CBD. After that, Tay says that the market may see a reduction in office spaces as more older buildings are converted to mixed-use developments.
“JLL is optimistic that demand for offices will remain healthy, anchored on its integral role as the primary place of work,” says Tay. She adds that Singapore still attracts technology firms, wealth management and family offices to set up offices in the city.
JLL has revised up its CBD Grade A rental forecast from 2-3% to 3-4% for the whole of 2021. “With no signs of slowing rent growth, we have upgraded our full-year rent forecast marginally,” says Tay.
“Underpinned by strong demand drivers, this also gives us much reason to believe that Singapore’s office rents will continue to make a good upward run in the near to medium-term,” she adds.