Chart of the Day: Rental growth of Grade A offices to be subdued in 2023

Rents will grow 2% YoY in 2023, according to Savills.

Rental growth of CDB Grade A offices in Singapore will be subdued in 2023, according to an outlook by Savills.

Economic and banking-related factors, as well as the restructuring in the tech industry, are expected to subdue demand for offices.

“As a base case, beyond the immediate issues, hybrid working, tenant’s cost to fit out a sustainable office space and AGI are likely to ease demand pressures. However, we are not discounting the possibility that if these new practices and adoption of technology spawn new industries, demand for office space may revive strongly,” Savills’ Alan Cheong and Simon Smith wrote in a report.

For 2023, Savills is maintaining its outlook of a 2% YoY growth for Grade A CBD office rents, vacancy levels hovering at around 7% to less than 8%.