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Singapore prime office rent and fit-out costs continue upward trajectory in 4Q2024: Savills

/ EdgeProp Singapore |

February 11, 2025 1:40 PM SGT

Net effective costs for office occupiers in Singapore rose 0.5% q-o-q in 4Q2024 (Picture: Samuel Isaac Chua/The Edge Singapore)

Net effective costs for prime office space in Singapore continued growing in the last quarter, with the city-state maintaining its ranking among the most expensive cities in terms of office space, according to findings from Savills’ latest Prime Office Costs report.

In 4Q2024, the average net effective costs (defined as an aggregate of rent and fit-out costs) to occupiers of prime office space in Singapore rose 0.5% q-o-q and 0.1% y-o-y to US$144.20 ($196) psf per annum, the report states.

This places Singapore with the sixth-highest average net effective cost out of the 35 cities and sub-markets monitored by Savills. “The rise in Singapore’s office cost continued in 2024 as the supply of Grade A offices was relatively tight and fit-out costs have been pressured by higher labour costs,” says Alan Cheong, executive director for research and consultancy at Savills Singapore.

Prime Office Costs Index, 4Q2024

Globally, the average net effective cost for prime office space inched up 0.1% q-o-q in 4Q2024, bringing full-year growth to 1.9%. London’s West End ranked as the most expensive office market with a net effective cost of US$277.55 psf per annum, though costs stayed flat compared to the previous quarter.

In Asia Pacific, net effective costs declined 1% q-o-q in 4Q2024, weighed down by Chinese markets which fell an overall 2.6% q-o-q due to muted economic confidence. On the other hand, Tokyo saw costs grow 0.3% q-o-q, while costs in Sydney and Melbourne were up by 1.7% and 1.6% respectively.

According to Savills’ research, other standouts were Dubai and Los Angeles, which registered growth in average net effective costs of 7% and 5%, respectively, supported by strong demand. “The 7% increase in Dubai is the largest of any market and the result of significant rental growth driven by constrained supply at the top end of the market combined with a growing number of new entrants seeking premium space,” the report adds.

Overall, office leasing activity increased by 18% in 2H2024 compared to the first half of last year, Savills says. “Almost all industries saw an increase in square footage transacted in 2H2024,” says Rick Schuham, CEO of global occupier services at Savills. He anticipates this momentum to carry on in 2025, with net effective cost growth across the world set to continue “for the foreseeable future”.

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