Grade A office rents rise by 1.4% in Q3: report
This is the highest yearly growth in a quarter since end-2019, Savills noted.
Grace A office rents went up by 1.4% year-on-year in the third quarter, which Savills noted as the highest growth recorded since the last quarter of 2019.
The third quarter performance of office rents in the central business district (CBD) also reflected an increase of 0.3% quarter-on-quarter.
“Whilst global economic conditions are souring, Grade A landlords may still be able to pass on higher conservancy charges by raising rents as new supply of Grade A CBS office supply in 2022 and 2023 is limited,” Alan Cheong, Executive Director of Research at Savills Singapore, said.
The net demand for CBD Grade A offices rose to 417,000 square feet in the quarter, leading to a total net take-up of 612,000 sq. ft. year-to-date.
Meanwhile, the vacancy rate contracted for the second consecutive quarter by 1.2 points to 5.6% in the third quarter. This is higher than the 0.4-point decline in the previous quarter.
For 2022, Savills maintained its rental projection at 3%YoY with rents expected to climb by 2%YoY in 2023.