Rental recovery in Singapore’s prime office market

0

Based on Knight Frank’s fourth quarter report in 2017, prime grade office rents have risen for three consecutive quarters on the back of active leasing activity.




Raffles Place / Marina Bay GradeA+

Grade A+ office space rents increase 1.7% on a quarterly basis in the Raffles Place / Marina Bay precinct measured by Knight Frank.

Landlords are gradually adjusting rents upwards in view of the limited new supply of prime offices being completed up to 2020.

Gross effective monthly rents in S$ psf per month basis are recorded between S$9.3 to S$9.8.

Raffles Place / Marina Bay Grade A

In the Raffles Place / Marina Bay Grade A segment, rents also increased 1.7% on a quarterly basis. Gross effective monthly rents in S$ psf per month basis are recorded between S$8.1 to S$8.6.

Also read: Capitaland buys Pearl Bank apartments

Shenton Way / Robinson Road / Tanjong Pagar Grade A

Average rents rose 1.3% over the quarter. Gross effective monthly rents in S$ psf per month basis are recorded between S$7.7 to S$8.3.

Marina CentreĀ  / Suntec Grade A

Average rents rose 1.7%, on par with the strong showing in the Raffles Place / Marina Bay area. Gross effective monthly rents in S$ psf per month basis are recorded between S$7.8 to S$8.3.




City Hall Grade A

Once popular with office occupiers, City Hall precinct rents grew 1.2% over the quarter as occupiers preferred the modern and newer submarkets of Raffles Place and Marina Bay. Gross effective monthly rents in S$ psf per month basis are recorded between S$8.0 to S$8.5.

Bugis Grade A

Average rents grew at 1.3%, slightly higher than City hall and the Orchard precincts. Gross effective monthly rents in S$ psf per month basis are recorded at S$7.6.

Orchard Grade A

Average rents rose by 1.2%, one of the lowest among the precincts tracked by Knight Frank. However, the positive growth is a sign that office occupiers are still considering the area traditionally known as Singapore’s shopping belt. Gross effective monthly rents in S$ psf per month basis are recorded between S$7.9 to S$8.4.

Outlook

Based on Knight Frank’s outlook, a flight to quality and efficiency trend that was dominant in 2017 will continue in 2018.

Tenants will gradually relocate to larger and more efficient floor plates in the light of evolving operational requirements.

Also read: Increasing number of property agents in the industry

The preference for larger floor plates are preferred over less scalable office spaces which are smaller, and which do not readily allow for activity based work.

Singapore’s economy continue to grow, driven particularly by government and private sector initiatives such as Fintech Hub Lattice80.




The Fintech hub recently announced plans to conduct an Initial Coin Offering (ICO) in 2018, using Singapore as a base. This may catalyse a new segment of untapped office space not seen before.

In addition, technological changes and the growing infocomm, technology and cyber security sector will lead the increase in office space demand.

Rents are expected to rise by at least 8 to 12% on a yearly basis through to the fourth quarter of 2018.


LEAVE A REPLY

Please enter your comment!
Please enter your name here