Singapore office rents fall in 3Q2023 on weaker demand: JLL
Singapore office rents dropped in 3Q2023, according to information documented by JLL in a Sept 25 press release. The consultancy adds that it observes the very first quarterly downtrend following nine consecutive quarters of office rental development in the city-state.
JLL’s analysis reveals that gross effective lease for Grade An office in the CBD slipped 0.3% q-o-q to around $11.29 psf each month in 3Q2023, down from $11.32 psf monthly in 2Q2023.
The decline originates from ongoing economic forces, states Andrew Tangye, head of workplace leasing and also advisory for JLL Singapore. “The unsure near-term outlook originating from a combination of lagging financial development, geopolitical tensions and climbing prices have actually continued to maintain occupiers careful and cost-conscious, resulting in weaker workplace take-up,” he adds.
She prepares for downward force on office rents to escalate, with leas dealing with further in the coming months amidst the current macroeconomic setting as well as incoming workplace supply. “Opposing the backdrop of an influx of upcoming undertakings competing for a very little pool of tenants, the temporary oversupply of office space can end up being more noticable,” she adds.
Tay Huey Ying, JLL Singapore’s head of research study and consultancy, acknowledges, including that office rent correction became much more prevalent this past quarter. “Our study reveals that greater than 15 properties regulated lower hires in 3Q2023 than in 2Q2023, which grabbed down the average hires for CBD Grade A space for the very first time ever since they reversed in 2Q2021.”
He associates the lower rentals to extra supply from office supply being actually returned to the market “at an increasing pace” as even more occupants right-size upon rental renewal to handle expenses.
3 office jobs are scheduled for completion in the CBD over the next 24 months– IOI Central Blvd Towers (1.3 million sq ft) and also Keppel South Central (0.6 million sq ft) in 2024, and the redeveloped Shaw Tower (0.4 million sq ft) in very early 2025. JLL states that to date, over 1.5 million sq ft is predicted to be still uninvolved.
Beyond the temporary headwinds, the medium-term overview for Singapore’s Grade A CBD workplace renting market continues to be brilliant, JLL says. Need will certainly be sustained by Singapore’s burgeoning reputation as a global hub, while the supply of office space in the CBD will stay constricted by a lack of greenfield sites along with URA’s focus on injecting more live and play places downtown.