CBD Grade A office rents projected to grow 4.6% in 2022

SG's positive economic outlook pushed the office market this year.

Singapore's CBD Grade A office rents were projected to grow by 4.6% year-on-year, with vacancy rates tightening to below 4% by end-2022, against a backdrop of projected sustained demand of 0.9m square feet (sqft) and limited supply of 0.8m sqft this year.

This was reported by Cushman & Wakefield in its Singapore Office Market Outlook 2022.

Head of capital markets Shaun Poh said, "With anticipated strong rental growth, investors looking to deploy capital into safe-haven assets with healthy returns will find the Singapore office market appealing. We may see higher office investment deals done with the Singapore market poised to outperform the broad Asia Pacific market in 2022. As the market continues to recover and with limited stock available for sale, buyers are price-takers. Amidst ample liquidity and keen demand, office capital values are expected to run up, and cap rates could compress further, despite rising interest rates. Assuming cap rates tighten to 3.10% in 2022 from 3.15% in 2021, CBD Grade A capital values could increase by over 6% this year."

Technology and financial occupiers will continue to be major sources of office demand in 2022. Singapore is a prominent tech hub globally, with 88 of the world's top 100 technology companies operating and 59% of tech multinationals establishing their regional headquarters in Singapore.