Singapore office rents fall in 3Q2023 on weaker demand: JLL

JLL’s research reveals that gross effective lease for Level An office space in the CBD slipped 0.3% q-o-q to approximately $11.29 psf each month in 3Q2023, below $11.32 psf per month in 2Q2023.

Tay Huey Ying, JLL Singapore’s head of research study and consultancy, recognizes, adding that workplace rent adjustment ended up being extra extensive this past quarter. “Our study displays that more than 15 investments commanded lesser hires in 3Q2023 than in 2Q2023, which dragged down the average hires for CBD Grade An area for the first time since they reversed in 2Q2021.”

The decrease comes from recurring economic pressures, claims Andrew Tangye, head of workplace leasing and advisory for JLL Singapore. “The unsure near-term outlook originating from a mixture of slowing down economic progress, geopolitical stress and increasing prices have actually remained to maintain occupiers wary and cost-conscious, causing weaker office space take-up,” he includes.

She anticipates downward strain on workplace rental fees to heighten, with rents correcting further in the coming months amid the present macroeconomic atmosphere and arriving workplace supply. “Against the backdrop of an increase of upcoming ventures fighting for a small pool of occupants, the short-term balance of office space might end up being more pronounced,” she includes.

Singapore office leas declined in 3Q2023, according to information reported by JLL in a Sept 25 news release. The consultancy includes that it marks the first quarterly decline adhering to nine constant quarters of office rental growth in the city-state.

He connects the lesser hires to much more supply from office space stock being returned to the market “at an increasing speed” as more occupants right-size upon rental renewal to handle prices.

Three workplace projects are arranged for completion in the CBD over the next 24 months– IOI Central Boulevard Towers (1.3 million sq ft) and Keppel South Central (0.6 million sq ft) in 2024, and also 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 approximated to be still uninvolved.

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Past the temporary headwinds, the medium-term overview for Singapore’s Grade A CBD workplace leasing market remains rich, JLL opines. Need will be sustained by Singapore’s growing credibility as a global center, while the supply of office space in the CBD will stay constrained by a scarcity of greenfield sites along with URA’s emphasis on adding more live and play places downtown.

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