Singapore office rents fall in 3Q2023 on weaker demand: JLL
Tay Huey Ying, JLL Singapore’s head of research as well as consultancy, recognizes, putting in that office rental correction came to be a lot more prevalent this previous quarter. “Our evaluation reveals that more than 15 properties commanded lesser rents in 3Q2023 than in 2Q2023, which grabbed down the average leas for CBD Level An area for the first time since they reversed in 2Q2021.”
Three office ventures are set up for conclusion in the CBD over the following 24 months– IOI Central Boulevard Towers (1.3 million sq ft) along with 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 unaffiliated.
He connects the reduced hires to more supply from office supply being gone back to the market “at a raising pace” as more tenants right-size upon lease renewal to take care of costs.
JLL’s research study shows that gross efficient rent for Grade A workplace in the CBD fell 0.3% q-o-q to approximately $11.29 psf per month in 3Q2023, down from $11.32 psf per month in 2Q2023.
She prepares for downward strain on workplace rents to heighten, with leas correcting even more in the coming months amid the existing macroeconomic environment and also incoming workplace supply. “Opposing the backdrop of an influx of future undertakings fighting for a limited pool of tenants, the short-term overrun of workplace might end up being a lot more noticable,” she adds.
Singapore office space leas declined in 3Q2023, according to data disclosed by JLL in a Sept 25 announcement. The consultancy adds in that it denotes the initial quarterly downtrend adhering to nine constant quarters of office space rental development in the city-state.
The decrease originates from ongoing economic pressures, says Andrew Tangye, head of office leasing as well as advisory for JLL Singapore. “The unsure near-term overview coming from a mix of slowing down economic development, geopolitical tensions and climbing costs have continued to keep occupiers cautious and even cost-conscious, resulting in weaker office space take-up,” he adds.
Beyond the short-term headwinds, the medium-term overview for Singapore’s Grade A CBD office space renting market stays brilliant, JLL says. Interest will be supported by Singapore’s growing reputation as a global hub, while the supply of office space in the CBD will certainly stay constrained by a scarcity of greenfield locations together with URA’s emphasis on adding more live and play places downtown.
