Prime Grade office rents in Raffles Place/Marina Bay up 5.5% YoY in 2022

The occupancy rate was also “healthy” at 95.5%.

The Raffles Place/Marina Bay precinct saw a 5.5% year-on-year (YoY) growth in 2022, exceeding the projection of a 3% to 5% increase at the start of the year.

In a report, Calvin Yeo, managing director, Occupier Strategy and Solutions at Knight Frank, noted that Prime Grade office rent in the precinct during the fourth quarter has also seen a 1.7% YoY increase in the fourth quarter, averaging at $10.69 psf pm.

“Due to the tight supply of new office inventory coupled with steady demand for traditional as well as co-working space, the office sector has become a landlord’s market,” the report read.

READ MORE: Rental growth in Core CBD Grade A office market to slow in 2023

The occupancy level has also stayed healthy at 95.5%, whilst the overall occupancy at the central business district (CBD) reached 94.2% from 93.6% in the last quarter.

Knight Frank said this came as businesses are looking for quality space that can support the full resumption of functions, and “meet the operational needs of a normalising economy.”

It added that hybrid working adoption “might not be as pervasive and permanent” in the long-term in the Lion City, noting that the proportion of staff under a remote work set-up declined to around 10% to 15%, from an average of 20%.

“As such, the leasing market remains active with office users on the continued lookout for better quality space,” it said, adding that tenants continue to relocate better spaces as the flight-to-quality trend continues.

Knight Frank said that office use innovations in the CBD are gaining traction, with the increasing popularity and range of flexibility offered by co-working spaces. This also serves as an option for occupiers who are uncertain if they are renewing or relocating, especially for smaller-space users.