2022-01-18-莱坊-Singapore_Office_Market_Update_Q4_2021_2页_688kb

Office Rental Market Analysis Q4 2021

Key Findings from Exhibit 1

• Rent Changes: Prime Grade A+ office rents in Raffles Place/ Marina Bay increased by 1.3% q-o-q, reaching an average of $10.95–$11.45 psf pm, while other Grade A areas showed marginal growth or stability in rentals.
• Vacancy Changes: Raffles Place/ Marina Bay Grade A+ vacancy rose by 3.2 percentage points, but CBD overall occupancy remains strong at 91.8%, with many new projects like CapitaSpring contributing to leasing activity.
• City-Wide Trends: Overall prime office rents for the island improved after a marginal increase of 0.2% in Q3 2021, with full-year 2021 rental decrease of 0.3% compared to a 10.2% decline in 2020, indicating resilience post-pandemic.

Market Outlook and Drivers

• Post-Pandemic Shifts: Hybrid work models are reshaping workplace demands, with 69% of respondents in Y(our)Space anticipating portfolio downsize by over 10%. However, 90% of respondents still view offices as strategic for talent retention and productivity.
• Supply and Demand: New office supply remains limited in Q4 2021–2025, with data showing limited pipeline projects, supporting potential rent increases; key developments include CapitaSpring, driving strong leasing by firms like LinkedIn and DataStax.
• Economic Forecast: Singapore's GDP growth projected at 3.0–5.0% for 2022, with strong prospects in ICT and Finance & Insurance sectors driving further space requirements, likely fostering continued rental growth.

Forward Projections

• Prime office rents are expected to rise by 3.0–5.0% in 2022 due to limited supply and shifting work preferences; hybrid arrangements underscore the need for flexible spaces and higher-quality environments.