Grade A office rents hit 15-year high in Q1

Rents are expected to surge further in 2024 due to higher demand.

Grade A office rents at the Central Business District (CBD) rose 1.3% QoQ in 1Q24 to an average of $11.42 per square foot (psf) per month from $11.27 psf in 4Q23, JLL reported.

This marks the highest rent recorded since the $12.55 psf per month in 4Q08 which came after a brief two quarters of corrections totalling 0.5%.

JLL predicted that the Singapore office leasing market will experience a rebound following the economy’s growth of 2.2% YoY in 4Q23 from 1.0% YoY in 3Q23 and the dull 0.5% YoY rises in 1Q/2Q23.

In 2024, JLL projects higher demand in rents by occupiers who held back relocation or expansion plans in 2023 which in turn will drive rents up further.

However, rent growth in 2024 may be capped by the substantial increase in office projects completing in the next 12 to 18 months including the IOI Central Boulevard Towers and Keppel South Central.

“CBD vacancy will rise momentarily to circa 7% with the impending completion of IOI Central Boulevard Towers which will provide occupiers space opportunity that is currently in short supply in other Prime Grade A CBD buildings. We expect CBD vacancy will reduce as IOI Central Boulevard Towers commitment rate increases,” Tay Huey Ying, Head of Research and Consultancy for JLL Singapore said.