Singapore office rents see subdued growth in 1Q2023: JLL

Grade A office rents in the Central Business District of Singapore grew in 1Q2023, but q-o-q growth slowed for the second straight quarter, says JLL (real estate consultancy). According to the research, the average gross effective rent for Grade A office spaces was $11.30 psf per month (psf pm), a slight increase of 1.0% q-o-q. This was lower than the 1.2% q-o-q growth recorded in the previous quarter and marked the first slowdown following five consecutive quarters of growth.

Andrew Tangye, head of office leasing and advisory for JLL Singapore, attributes this easing rental growth to macroeconomic uncertainties which influence demand for office space. Many large space users chose to “press the pause button” on their expansion and relocation plans.

Small-to-medium-sized space occupiers still drove leasing activity in 1Q2023, due to their immediate requirements like new market entrants and space to accommodate new workplace designs and increased hirings. Examples include companies such as German insurer Munich Re and fine wine merchant Corney & Barrow.


Head of research and consultancy for JLL Singapore, Tay Huey Ying, suggested that despite current hesitance, occupants seized the opportunity to upgrade to better office spaces at new and upcoming completions – due to the lack of Grade A office space. An example, located in the Bugis-Beach Road area, is Guoco Midtown, which received its Temporary Occupation Permit in January and has secured tenants for around 80% of its space in 1Q2023. IOI Central Boulevard Towers, in the Marina Bay financial district, is also estimated to have 45% of its space pre-committed or under advanced negotiation – due for completion in 3Q2023.

Tay believes demand for office space will remain muted, but leasing activity for recent or soon-to-be completed projects is expected to regain some traction. She anticipates backfilling of spaces vacated by relocating occupiers could take a little longer, keeping rent growth modest, if at all, for the rest of the year.

Tangye forecasts that rental growth in the CBD will accelerate post-2024, fuelled by a dip in new completions and a return in demand as the economic situation improves. With rent growth slightly subdued for the time being, and a few projects due for completion in the next two years, he believes that now is a good time for occupied, particularly large space users, to take advantage of the market situation.