Average monthly rents of Overall CBD Grade A offices up to $9.64 psf

Marina Bay and Tanjong Pagar have increases in vacancy rates QoQ.

The average monthly rents for this office sector grew for the next consecutive quarter by 0.5%, Savills said. 

Office landlords are increasing rents because of the lack of tenants’ freedom to move. This is the result of the high cost of fit-out and the growth of rental lease terms from the three-year tenure to the five-to-seven-year term. 

A reason for this could be due to many tenants not wanting to incur capital expenditures on high costs of fit-outs for relocation, the latter having grown about 20% as compared to the 2019 days.

Amongst Grade A offices, rents of premium offices (Grade AAA) were the most resilient, recording the largest growth of 1.2% QoQ, whilst Grade A buildings grew by a smaller 0.7% QoQ. The rental changes for Grade AA offices are still unchanged after a 0.1% growth in Q1/2023.

Rental increases were registered in City Hall (1.2%), Raffles Place (1.0%), Marina Bay (1.0%), Shenton Way (0.8%) and Beach Road/Middle Road (0.7%). Monthly rents of Grade A offices in City Hall and Orchard Road continued to remain unchanged on a quarterly basis in the quarter.