Office rents up 2.4% in 2Q2022 on return-to-office momentum
Lam Chern Woon, head of research and also consulting at Edmund Tie, emphasize that significant leasing activity in 2Q2022 includes Amazon’s reported take-up of 369,000 sq ft of space at the upcoming IOI Central Blvd Towers and also Blackstone’s moving from Tower 2 to Tower 1 at Marina Bay Financial Centre, increasing its workplace footprint. The upcoming Guoco Midtown property additionally got traction in leasing activity during the quarter, with tenants like ConocoPhillips and also Swiss Re coming on board.
Looking ahead, while the return-to-office momentum will proceed moving the office renting market, there are indicators that global economic headwinds are beginning to influence some occupiers’ property choices, which could solidify office demand in 2H2022, states Tay Huey Ying, head of research as well as consultancy, Singapore at JLL.
“This good take-up was likely helped by displacement activity, in addition to new sets up in the lawful area and non-bank financial institutions,” mentions Tricia Song, CBRE head of research study, Singapore and also Southeast Asia. Song adds there was even a decrease of 473,612 sq ft in workplace supply, likely because of the removal of AXA Tower as it commenced demolition jobs, which additionally sustained lower vacancy rates.
The stronger performance was underpinned by Singapore even more relieving office constraints, with 100% of staff members allowed to go back to the workplace since April 26.
Leonard Tay, head of study at Knight Frank Singapore, thinks that office rental fees will certainly hold firm in spite of a feasible economic crisis, backed by demand driven by the “flight to safety” to Singapore by special well-off, corporates as well as MNCs. Knight Frank keeps a projection of 3% to 5% development in leas for the entire of 2022.
The islandwide office vacancy price reduced by 0.8 percentage points to 12%, driven by favorable net absorption of 258,334 sq ft in 2Q2022. This marks a reversal after five successive quarters of adverse net absorption.
Catherin He, head of research, Singapore at Colliers, mentions that the rental growth was broad-based, with average rents of both Category 1 and Category 2 office raising q-o-q by 0.9% as well as 4% specifically. Based on a basket of office buildings 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.
Workplace rental fees in the Main region expanded by 2.4% q-o-q in the second quarter, according to data released by URA on July 22. This is more than the 1.6% rise recorded in the previous quarter and also registers a third consecutive quarter of expansion.
However, she prepares for full-year development for CBD Grade A gross effective rents might still double the 4.3% appeared 2021, considered that they have actually already climbed by 5% in the very first half of the year.