What is driving demand in the office market?

The market is expected to post a full-year rental growth of around 3% to 5%.

Business services firms in the Asia-Pacific (APAC) region and technology startups from Southeast Asian countries have been driving demand in Singapore’s office market, Knight Frank said.

In a report, the property expert said business service firms relocating their headquarters to Singapore amidst geopolitical tensions has been increasing.

“With Singapore identified as a key business node by many multinational companies (MNCs) in a continued ‘flight to safety,’ demand for office space was healthy as corporates sought the stability of the city-state for business continuity,” Knight Frank said.

There has also been an increase in technology startups, particularly from Indonesia, and private equity companies and family offices (FOs) setting foot in Singapore.

Knight Frank said such companies were probably attracted by Singapore's “established sophisticated financial infrastructure and political stability.”

Companies which have expanded in Singapore include TR Capital and WeWork.

Knight Frank said Singapore will continue to be a shelter for multinational firms to weather the coming economic challenges.

With occupancies steadily tightening and leasing activity to remain firm for the rest of 2022, Knight Frank maintains its forecast of 3% to 5% growth in rents for the whole of the year.