Core CBD Grade A rents to stabilise in 2H23

EDMUND TIE expects a lower rental growth of 0.3% -0.5% for the market in 2023.

As economic uncertainties continue to curb the appetite of corporates to expand their office footprints, real estate experts expect Grade A office rents in the Central Business District to stabilise in the second half of the year (2H23).

"Rents and occupancies could come under pressure amid a more cautious environment, as high-interest rates and weaker economic growth persist for the rest of the year," CBRE said.

"Continued corporates’ cost-cutting exercises could result in shadow space potentially increasing, which could compete with new office supply which is still largely uncommitted,” CBRE added.

EDMUND TIE expects rents for Grade A offices in the CBD to grow only by 0.3%-0.5% in 2023, adding that most occupiers will "opt for renewals as safe status quo measures.". 

What can drive demand in the office sector are flexible space operators, and the entry of more multinational companies and family offices in Singapore, said Edmund Tie.