Singapore office rental growth starts to taper off

Overall CBD Grade A rents inched up 0.2% to S$9.59 psf in Q1.

The average monthly rents of CBD Grade A offices in Savills basket continued its upward trend, edging up 0.2% QoQ to S$9.59 psf in Q1/2023. 

Nonetheless, after a 2.2% growth for the whole of last year, rental growth has started to taper off in view of higher vacancy levels, the Savills report added.

Here’s more from Savills:

Global economic uncertainties and influx of shadow space caused by tech-sector meltdown and business restructuring have formed obstacles for further rental increases. 

By grade, the Grade AAA office sector had the highest rental growth at 0.4% QoQ, followed by both Grade AA and Grade A with a 0.1% quarterly increase. 

By location, positive QoQ rental increases were observed in Raffles Place (1.1%), Beach Road/Middle Road (0.5%), Shenton Way (0.3%) and Marina Bay (0.1%). Office rents in City Hall, Tanjong Pagar and Orchard Road remained unchanged from a quarter ago.