Office rents up 2.4% in 2Q2022 on return-to-office momentum
The stronger efficiency was underpinned by Singapore additionally easing work environment limitations, with 100% of staff members enabled to return to the office as April 26.
Catherin He, head of study, Singapore at Colliers, notes that the rental growth was broad-based, with typical leas of both Classification 1 and Group 2 office spaces raising q-o-q by 0.9% as well as 4% specifically. Based on a basket of office complex tracked by Colliers Research, rental fees of the Core CBD Premium & Grade A sector increased by 1.8% from the preceding quarter to $11.10 psf each month.
Leonard Tay, head of research at Knight Frank Singapore, thinks that workplace rental fees will certainly hold firm in spite of a possible recession, backed by need driven by the “flight to safety” to Singapore by private wealthy, corporates and MNCs. Knight Frank preserves a projection of 3% to 5% expansion in rental fees for the whole of 2022.
Looking ahead, while the return-to-office force will continue propelling the workplace renting market, there are indicators that international financial headwinds are beginning to affect some tenants’ realty choices, which can toughen up workplace need in 2H2022, claims Tay Huey Ying, head of research as well as consultancy, Singapore at JLL.
Nevertheless, she prepares for full-year growth for CBD Grade A gross reliable rental fees could still multiply the 4.3% appeared 2021, considered that they have currently risen by 5% in the initial part of the year.
Workplace leas in the Main region expanded by 2.4% q-o-q in the 2nd quarter, according to data published by URA on July 22. This is more than the 1.6% rise recorded in the previous quarter and also marks a third successive quarter of growth.
“This favorable take-up was most likely helped by displacement activity, in addition to new sets up in the lawful part as well as non-bank financial institutions,” mentions Tricia Song, CBRE head of study, Singapore as well as Southeast Asia. Song adds there was also a reduction of 473,612 sq ft in workplace supply, likely as a result of the elimination of AXA Tower as it began demolition works, which even more sustained reduced vacancy prices.
Lam Chern Woon, head of study as well as consulting at Edmund Tie, emphasize that notable leasing activity in 2Q2022 consists of Amazon’s reported take-up of 369,000 sq ft of room at the upcoming IOI Central Boulevard Towers and Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, increasing its workplace footprint. The upcoming Guoco Midtown project likewise gained grip in leasing event during the quarter, with renters like ConocoPhillips and Swiss Re coming on board.
The islandwide workplace openings price lowered by 0.8 percentage indicate 12%, driven by positive net absorption of 258,334 sq ft in 2Q2022. This notes a turnaround after five successive quarters of negative net absorption.