Singapore Office Rent will continue up trend : Singapore CBD office rental will continue its uptrend as property analysts expecting rents to keep rising in 2023. Major office landlords are also benefiting from the tight market, with leases being renewed at higher rents.
The increased demand for space has also led to the dropping of office vacancy levels from 6.3% to 5%.
And now, the prestigious Grade A office rents in the central business district have axtually hit $11.70 per square foot per month in this quarter which is now in its seventh consecutive quarter of expansion.
This means the 2022 full-year growth to 8.3 per cent, well extending the poor 3.8 per cent expansion back in 2021.
The average rents for its Singapore office leases signed were 7.9 per cent higher than the average rents for expiring leases in the first nine months of 2022, while occupancy rate as at Sept 30 was 96 per cent, up from 91.7 per cent at the same time in 2021.
Singapore Office Rent will continue up trend : What about the office rental trend for 2023
With the possibility of mass layoffs and hiring freezes in the tech sector, Singapore office rental market could take a hit in 2023. This is because tech sector has actually led in about 50 per cent of the total gross leasing demand in the past two years. Vacancy rates could also increase.
Looking at 2023, the office leasing market would see concerns of a global recession, and that businesses could become more cautious if the economic outlook darkens substantially.
Despite disruptions from the tech sector, the market could remain healthy as workers continue to return to the office post Covid and that more and more Chinese companies relocate to Singapore for a more stable operating environment.
Property analysts said that while economic growth here could be slower in 2023, they still expects the office rental market to grow by 5 to 10 per cent year-on-year along with increased hiring and an improved labour market. The Singapore REIT market looks to benefit from this uptrend too
