Singapore prime office rents hit pause after 3 years of non-stop growth: CBRE

Chinese tech, legal firms are the main demand drivers this quarter.

Rents of Grade A offices in Singapore’s core central business district (CBD) held steady at $11.95 psf per month in the second quarter, pausing after rising non-stop for the past 12 quarters, according to CBRE.

CBRE said Grade A office rents have already risen by 14.9% over the past three years but rental growth for this quarter has been tempered by the surge of incoming new supply and a temporary increase in vacancies. In the first half of 2024, it said Grade A core CBD office rents are up 0.4%.

Tenants are now presented with more workspace options given the significant volume of upcoming lease expiries as well as the completion of IOI Central Boulevard Towers, according to David McKellar, CBRE Co-head of Office Services and Occupier Services. 

To attract tenants and fill their buildings, McKellar said office landlords have also become more open to negotiating rents. 

The property agency said firms in the legal sector and some of China’s tech giants were the biggest demand drivers of workspace in Singapore’s core CBD.

CBRE kept its rental growth forecast unchanged at 2% to 3% for the full year 2024.

“While the new completions have temporarily softened the upward pressure, we may see a pick-up in H2 2024 with leasing activity for new developments gaining momentum,” said Tricia Song, CBRE's Head of Research.