Grade A office space average rent up 2.3% QoQ to $10.46: JLL

It is the fastest office rent growth since the second quarter of 2021.

The average gross effective rent for Grade A Central Business District (CBD) office space in Singapore increased 2.3% from $10.23 per square foot (psf)/month in the fourth quarter of 2021 to $10.46 psf/month in the first quarter of 2022, real estate consultancy firm, JLL, said.

According to JLL, it is the fastest pace of growth since demand for rents increased around the second quarter of 2021. Overall, rents have recovered by 6.9% from $9.79 psf/month in the first quarter of 2021.

Tay Huey Ying, JLL Singapore’s head of research and consultancy, said the rapid growth stemmed from high demand for office space as corporate firms acknowledge the role of physical offices in “workplace strategy” despite the push for hybrid working schemes.

He added that amongst the four CBD submarkets tracked by JLL, Marina Bay recorded the sharpest QoQ rent growth of 3.2% from $11.77 psf/month in the fourth quarter of 2021 to $12.14 psf/month in the first quarter of 2022. 

Whilst active office demand space comes from technology and financial sectors, Andrew Tangye, head of office leasing and advisory at JLL Singapore, said more industries also eye office spaces in the first quarter of 2022 as businesses position themselves for growth amidst the revival of the global economy.

With this pace of back-to-office recovery, JLL maintained its outlook that the 2022 CBD Grade A rent growth will at least double the 4.3% documented in 2021.