Singapore office rents fall in 3Q2023 on weaker demand: JLL
Tay Huey Ying, JLL Singapore’s head of study as well as consultancy, acknowledges, including that workplace rental adjustment became extra extensive this previous quarter. “Our analysis shows that more than 15 investments commanded lower hires in 3Q2023 than in 2Q2023, which grabbed down the standard leas for CBD Level An area for the very first time ever since they turned around in 2Q2021.”
The decline comes from ongoing economic pressures, claims Andrew Tangye, head of office space leasing as well as advisory for JLL Singapore. “The unsure near-term outlook stemming from a combination of slowing down economic progress, geopolitical stress and climbing prices have remained to maintain occupants cautious plus cost-conscious, leading to weaker office take-up,” he adds.
Singapore office space rents dropped in 3Q2023, according to data reported by JLL in a Sept 25 news release. The consultancy adds that it denotes the very first quarterly decline adhering to nine constant quarters of office rental development in the city-state.
He associates the lower hires to much more supply from office space stock being actually gone back to the market “at an escalating pace” as even more tenants right-size upon rental renewal to take care of costs.
JLL’s research presents that gross efficient lease for Grade An office in the CBD fell 0.3% q-o-q to around $11.29 psf monthly in 3Q2023, down from $11.32 psf monthly in 2Q2023.
She expects descending pressure on workplace leas to escalate, with rents dealing with even more in the coming months amid the present macroeconomic atmosphere as well as arriving workplace supply. “Against the backdrop of an increase of upcoming projects challenging for a very little pool of renters, the temporary oversupply of office space can end up being a lot more noticable,” she adds.
3 workplace projects are arranged for finalization in the CBD over the following 24 months– IOI Central Blvd Towers (1.3 million sq ft) and Keppel South Central (0.6 million sq ft) in 2024, and the redeveloped Shaw Tower (0.4 million sq ft) in early 2025. JLL states that to date, over 1.5 million sq ft is estimated to be still uncommitted.
Past the temporary headwinds, the medium-term expectation for Singapore’s Level A CBD office renting market continues to be rich, JLL opines. Need will certainly be supported by Singapore’s burgeoning credibility as a worldwide center, while the supply of office in the CBD will certainly stay constricted by a shortage of greenfield sites along with URA’s focus on adding more live and play spots downtown.