Singapore’s office market: A temporary pause or a prelude to a structural decline?

November 21, 2024

This has come about as Asia-Pacific markets, including Singapore, saw a faster return to office compared to Europe and US, amid tight supply and new project delays.

However, the positive rent growth has paused since Q2 2024, with prime rents remaining flat for two consecutive quarters.

The latest URA data has also shown that the office rental index (Central Region) registered a 0.5 per cent quarter-on-quarter decline, and median rents of Category 1, a proxy for the best office spaces in the city centre (based on contracts signed), declined by 0.8 per cent quarter on quarter in Q3 2024.

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The slowdown can be attributed to the vacancy spike to 7.8 per cent, following the completion of IOI Central Boulevard Towers, which added 1.2 million square feet of office space in the last few months.

The high vacancy has shone a spotlight on the noticeable lack of large demand drivers since late 2022. The expansions and new set-ups from tech firms, which previously occupied large chunks of space in excess of 30,000 square feet, have dried up.

Source: The Business Times