Singapore CBD office rents increase for the first time since 2019

CBD Grade A office rents are up 0.7% to S$9.44psf in Q1 2022.

The average monthly rents of Savills basket of CBD Grade A offices recorded its first QoQ increase since Q2/2019 when office rents rose 1.0% QoQ. This is in line with the firm’s view that more tenants are deciding not to right size but maintain their office footprint or even accommodate staff increases in future through hybrid work arrangements.

Data from Savills reveal that monthly CBD Grade A office rents inched up by 0.7% QoQ to S$9.44 psf in the first quarter of 2022. On a YoY basis, this represented a 0.3% growth, the first increase since Q1/2020 when office rents rose by 0.1% YoY. 

Here’s more from Savills:

Rents of Grade A offices registered the largest QoQ expansion of 0.8%, followed by Grade AAA offices and Grade AA offices which grew by 0.7% and 0.6% respectively in the quarter. While rents of Grade AA and A offices continued their upward trajectory, rents of Grade AAA offices saw their first quarterly increase since Q2/2019 when office rents rose 1.0%. 

Rents of CBD Grade A offices across all micro-markets increased in the quarter. The only micro-market which did not experience any increase were Orchard Road and Tanjong Pagar. Amongst the micro-markets which showed QoQ rental growth, the largest was observed in Beach Road/Middle Road where office rents rose 2.9% on a QoQ basis. 

This was followed by Raffles Place, which registered a QoQ increase of 1.1%, after showing a marginal growth of 0.1% QoQ in Q4/2021. With the office leasing market continuing to improve, rental growth is expected to accelerate in the coming quarters.