Have Singapore office rents bottomed out yet?
Q3 Grade A office rents increased 0.7% for the first time in five quarters.
After five consecutive quarters of decline, Singapore Grade A office rents in the Central Business District (CBD) finally inched up 0.7% quarter-on-quarter (QOQ) to SGD9.59 (USD7.08) per square foot in the third quarter of 2021. The rental rebound was due to the demand for quality office space in Raffles Place and the New Downtown (Premium), as well as newer buildings in Shenton Way and Tanjong Pagar.
In a reversal of trends, Colliers says net absorption turned to a strong positive showing of 398,600 square feet (37,000 square metres) from a contraction of 12,600 square feet (1,170 square metres) a quarter ago. New demand continued to be driven by the technology companies, including LinkedIn, which expanded an additional 22,000 square feet (2,044 square metres) of office space in Marina Bay Financial Tower 2.
June Chua, Executive Director, Head of Tenant Representation | Singapore, commented: "Grade A office rents in Q3 2021 appeared to have bottomed out, and the office market has entered a phase of a U-shaped recovery. Demand continues to be supported by the expansion of technology firms, as their intensified talent acquisition efforts have led to the growing need for good-quality office space to accommodate the additional headcounts.”