What were the key drivers of Singapore office demand in Q3?

There was more activity from smaller space occupiers.

According to a Knight Frank report, during the pandemic, the focus on information technology (IT) spurred the rapid growth of IT companies that aggressively took up space in the CBD. 

“However, post-pandemic, with consumer dollars moving towards travel and lifestyle, the current technology slowdown and global fears of a possible US recession, these firms have been and will continue to reduce their office footprints,” the report said.

Here’s more from Knight Frank:

Alongside international banks that have long been in the process of reducing office space requirements over the past ten years due to technology, office users are creatively increasing the quality and experience of the workplace post-pandemic while at the same time using less space.

During the quarter and throughout most of the year, relocations and expansions from larger office occupiers both domestically and cross border were few and far between. The lack of available larger optimal floorplates of around 30,000 sf coupled with an uncertain economic climate, impeded the movement of such occupiers looking to consolidate all the various business functions under one roof. 

Instead, smaller space occupiers were more active with modest demand stemming from companies such as those from North Asia establishing new offices in Singapore. The former Meta space at South Beach Tower comprising 115,000 sf has broadly been backfilled by smaller occupiers.

The city-state also remained attractive among companies in the investment and wealth management sectors, with many citing Singapore as a stable and modern established gateway city. One example included US-based electronic trading company Millennium Advisors that was reported to have recently opened a new office in Singapore in Marina Bay Financial Centre Tower 1. 

As of August 2024, it was reported that Singapore had a total of 1,650 single family offices (SFOs), an increase from the 1,400 at end-2023. Although SFOs do not take up large tracts of office space (typically less than 5,000 sf), the increase in the number of SFOs contribute to boutique demand in the office leasing market, as wealthy families are drawn to the city-state due to the predictable and robust regulatory regime, a world-class education system and an ecosystem of professional service providers and wealth managers.