Office rents up 2.4% in 2Q2022 on return-to-office momentum


Workplace rents in the Main area grew by 2.4% q-o-q in the 2nd quarter, according to information launched by URA on July 22. This is higher than the 1.6% rise reported in the previous quarter and also views a third consecutive quarter of growth.

Lam Chern Woon, head of research and consulting at Edmund Tie, highlights that significant leasing task in 2Q2022 includes Amazon’s reported take-up of 369,000 sq ft of area at the upcoming IOI Central Boulevard Towers as well as Blackstone’s relocation from Tower 2 to Tower 1 at Marina Bay Financial Centre, increasing its workplace presence. The upcoming Guoco Midtown development additionally obtained grip in leasing undertaking throughout the quarter, with renters like ConocoPhillips as well as Swiss Re coming on board.

However, she prepares for full-year success for CBD Grade A gross effective leas can still increase the 4.3% appeared 2021, considered that they have actually currently climbed by 5% in the very first part of the year.

Leonard Tay, head of research at Knight Frank Singapore, believes that workplace leas will certainly hold firm in spite of a possible recession, backed by need driven by the “flight to safety” to Singapore by exclusive well-off, corporates and also MNCs. Knight Frank preserves a calculation of 3% to 5% development in leas for the whole of 2022.

Looking ahead, while the return-to-office force will proceed propelling the workplace leasing market, there are signs that global financial headwinds are beginning to influence some occupiers’ realty decisions, which could toughen up office need in 2H2022, states Tay Huey Ying, head of research as well as consultancy, Singapore at JLL.

“This positive take-up was likely contributed by displacement activity, in addition to new set-ups in the lawful sector and non-bank financial institutions,” remarks Tricia Song, CBRE head of research study, Singapore as well as Southeast Asia. Song adds there was also a decline of 473,612 sq ft in workplace supply, likely due to the removal of AXA Tower as it started demolition works, which better sustained reduced vacancy rates.

The islandwide office vacancy rate lowered by 0.8 percent indicate 12%, driven by favorable net absorption of 258,334 sq ft in 2Q2022. This marks a change after 5 continuous quarters of adverse net absorption.

The stronger efficiency was underpinned by Singapore additionally reducing workplace constraints, with 100% of employees permitted to go back to the office since April 26.

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Catherin He, head of research, Singapore at Colliers, notes that the rental development was broad-based, with median leas of both Group 1 as well as Category 2 office spaces raising q-o-q by 0.9% and 4% respectively. Based upon a basket of office buildings tracked by Colliers Study, rents of the Core CBD Premium & Grade A section increased by 1.8% from the preceding quarter to $11.10 psf monthly.


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