How did the office market perform in 2023? 

In 2023, Grade A office rents grew by 1.7% YoY.

The office market “surpassed expectations” in 2023, with Core CBD (Grade A) office rents growing 1.7% YoY.

CBRE said that whilst full-year rental growth is more modest than the 8.3% rental growth in 2022, it has outpaced the projected GDP growth of 1.0% for 2023.

Despite the lack of new supply, CBRE said net absorption for Core CBD (Grade A) was a positive 0.10 million sq. ft. in 2023, marking the fourth consecutive year of positive absorption since 2019.

To add, vacancies in the Core CBD dropped to 3.5% in 2023 from 4.2% in 2022.

“Selected premium office space with quality specs in the Core CBD was also highly contested among competing tenants, leading to rental escalation,” CBRE said.

“Shadow spaces in prime areas like Marina Bay and Raffles Place attracted occupiers seeking high-quality, fitted office spaces. Some shadow spaces were also taken off the market as tech occupiers decided to retain their office premises,” CBRE added.