SG office rents up as workplace revolution persists

Prime office rents rose 1.5% QoQ in the fourth quarter of 2021.

Prime office rents in the Raffles Place/Marina Bay precinct climbed 1.5% quarter-on-quarter to $10.13 per square feet (sf) per month in the last quarter of 2021, the second consecutive quarter after it increased 0.2% previously.

In its fourth-quarter 2021 report on Singapore offices, Knight Frank noted prime office rents in 2021 recorded a full-year decrease of 0.3%, which is marginal compared to the 10.2% decline seen in 2020.

Knight Frank noted the improvement in office rents is linked to the ongoing revolution of the workplace as offices are reconfigured to utilise less space for a more collaborative function.

“With 47% of global respondents expecting the quality of their office space to increase over the next three years according to Knight Frank’s workplace report Y(our)Space 2021, business leaders are increasingly compelled to curate a productive, enjoyable, flexible, and healthy work environment that attracts and retains talent,” the report read in part.

In addition, businesses are expected to recalibrate the quantum of space needed. The Y(our) Space 2021 report also found that 69% of respondents anticipate a portfolio resize by 10%.

Moreover, fintech and technology players, and international professional services are amongst the demand drivers as they continue to fill spaces in the central business district.

According to Knight Frank, new schemes like the CapitaSpring have seen strong leasing activity supported by these players.

For instance, the Millennium Capital expanded to take up 60,000 sf, Pramerica Financial Asia took up 10,000 sf, whilst Southern Ridge Capital relocated to CapitaSpring in order to expand.