Office rents up 2.4% in 2Q2022 on return-to-office momentum
Lam Chern Woon, head of research study and consulting at Edmund Tie, emphasize that significant leasing task in 2Q2022 includes Amazon’s reported take-up of 369,000 sq ft of room at the upcoming IOI Central Blvd Towers and Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, increasing its workplace presence. The upcoming Guoco Midtown project likewise gained grip in leasing event during the quarter, with occupants like ConocoPhillips and Swiss Re coming on board.
Leonard Tay, head of research at Knight Frank Singapore, believes that office rental fees will hold firm in spite of a feasible recession, backed by need driven by the “flight to safety” to Singapore by exclusive wealthy, corporates and MNCs. Knight Frank keeps a projection of 3% to 5% expansion in leas for the entire of 2022.
Nonetheless, she prepares for full-year growth for CBD Grade A gross efficient leas can still double the 4.3% clocked in 2021, given that they have currently increased by 5% in the very first half of the year.
Catherin He, head of research study, Singapore at Colliers, notes that the rental growth was broad-based, with mean leas of both Group 1 and also Group 2 office enhancing q-o-q by 0.9% and 4% specifically. Based upon a basket of office buildings tracked by Colliers Research, rental fees of the Core CBD Premium & Grade A section increased by 1.8% from the coming before quarter to $11.10 psf per month.
“This positive take-up was most likely helped by displacement task, as well as new sets up in the legal sector and non-bank financial institutions,” says Tricia Song, CBRE head of research, Singapore as well as Southeast Asia. Song includes there was even a loss of 473,612 sq ft in office stock, likely as a result of the removal of AXA Tower as it commenced demolition works, which further sustained lower vacancy prices.
Looking ahead, while the return-to-office force will certainly continue propelling the office renting market, there are signs that worldwide economic headwinds are beginning to impact some inhabitants’ real estate choices, which could temper office need in 2H2022, claims Tay Huey Ying, head of study and also consultancy, Singapore at JLL.
The more powerful performance was underpinned by Singapore further easing workplace restrictions, with 100% of employees permitted to go back to the workplace as April 26.
Workplace rents in the Main region grew by 2.4% q-o-q in the second quarter, according to information released by URA on July 22. This is higher than the 1.6% rise documented in the previous quarter and also registers a 3rd successive quarter of expansion.
The islandwide office vacancy rate decreased by 0.8 percent points to 12%, driven by positive net absorption of 258,334 sq ft in 2Q2022. This marks a reversal after five continuous quarters of adverse net absorption.
