Singapore Q1 Grade A office rents rebound by 0.7%

The rental growth was driven by the premium segment.

According to data from Colliers, Singapore’s core CBD Premium & Grade A office rents rebounded 0.7% QOQ during 1Q 2024 (after two consecutive quarters of decline) to SGD 11.57 per sq ft, demonstrating the strength and resilience of the market.

“This growth in rents was driven by the Premium segment, particularly those at Raffles Place/New Downtown. Limited pockets of quality space were snapped up at higher rents, while renewals were also signed at higher rates as tenants view that as a more economical option than relocating,” the analyst said.

Here’s more from Colliers:

This growth in rents was driven by the Premium segment, particularly those at Raffles Place/New Downtown. Limited pockets of quality space were snapped up at higher rents, while renewals were also signed at higher rates as tenants view that as a more economical option than relocating.

Nevertheless, it is a mixed market; while rental expectations have softened for buildings with persistent vacancies and high upcoming secondary spaces, quality buildings with good locations are still able to hold up, or even command higher rents. It has been observed that some landlords are more willing to offer more incentives to secure tenants.

Demand remains diversified, with consumer goods, law firms, and non-bank financial firms looking for space. Unlike the previous quarters, when technology firms were right-sizing, they are now maintaining status quo with potentially other avenues of growth, such as in Artificial Intelligence. Nonetheless, office demand remains muted, with occupiers prudent in spending and driving space optimization. Most still see the need to rationalize their footprint, but any move would depend on the corresponding savings.