Record building completion to soften office rents in 2024

Savills expects rents to soften from -2% YoY to -3% YoY.

Office rents are likely to soften to -2% YoY to -3% YoY in 2024 on the back of record levels of building completions in the CBD and non-CBD areas.

“The significant reduction in net supply in 2022 has created a tight market situation whose effects could be felt for 2023 and partially into 2024, hence the rental adjustment is expected in 2024 rather than in 2023,” Savills said.

In a report, Savills said there will be a spike in CBD and non-CBD supply in 2024 from the completion of projects like Central Boulevard and Keppel South Central, and Labrador Tower and Paya Lebar Green, respectively.

“Some landlords may use this time to undertake extensive asset enhancement work for their buildings,” Savills added.

Looking at 3Q23, Savills said office rental growth has slowed with the average monthly rents of CBD Grade A offices in Savills basket inching up marginally for the seventh consecutive quarter, albeit at a moderated pace of 0.1% QoQ, compared to the 0.7% in 2Q23, to S$9.64 psf.

For the first three quarters of this year, rents have risen by 1.1%.

Meanwhile, vacancy rates of CBD Grade A offices rose in 3Q23 by 0.6 ppt QoQ to 7.1%.

“[The increase] was largely led by the inclusion of Guoco Midtown into the office stock, which brought an increase in vacancy rates of Grade AAA buildings from 5.5% in 2Q23 to 7.2% in 3Q23, marking the fourth consecutive quarter of increase,” Savills said.

In the investment sales front, office transactions declined further, with fewer strata title deals and no block transactions.

Follow the link for more news on

Savills

singapore office rents

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia