Singapore is one of the markets leading the flight-to-quality trend in APAC: CBRE

Green offices are also popular among occupiers in the city-state.

The demand for premium, core office locations in Asia Pacific has been among the strongest in the Lion City, according to a new report by CBRE.

Japan and Australia join Singapore in leading the ongoing flight-to-quality trend in APAC, where occupiers are preferring or moving to higher quality workspace. 

Upgrading to buildings with premium green features or green building adoption rate has also been high in Singapore and Australia. In Tokyo, there was even an exodus of tenants from Grade A- buildings to newly built Grade A offices.

The majority of the flight-to-quality leasing transactions in these three leading markets occurred in places with easy access to public transport.

CBRE said the demand for quality workspace in Singapore stems from employees’ preference to work in the central business district where there is better connectivity and commuting times are shorter.

The push from the government is also helping with the overall high green building adoption in the city-state.

Despite the strong demand, Singapore lagged in office rental growth compared to its peers in APAC, which CBRE said might be caused by an already high rental base and potentially, limited product offerings. 

The city-state is joined by Seoul and Ho Chi Minh City as among the laggards in terms of cumulative rental growth for prime office rents between 2021 and 2023.

The pipeline of new supply of Grade A offices in Singapore will stay moderate but CBRE expects the overall inventory of prime deskspace to rise, leading to greater competition among landlords.

Singapore Grade A office rents recovered with a 0.7% uptick in the first quarter to snap two consecutive quarters of decline.