Singapore CBD Grade A office rents rise for 10th straight quarter in Q2

Rents increased by 0.4% YoY during the quarter.

Owing to cost containment pressures, most companies in Singapore are opting to renew their leases. On top of this, Savills said in a report that the larger leases are only due for renewal in 2H/2025 and 2026, and landlords are maintaining their asking rents, resulting in office rents to remain resilient. 

“Hence, the average monthly rents of CBD Grade A offices in Savills basket inched up marginally by 0.2% QoQ to S$9.67 psf in Q2/2024 after remaining flat in the previous quarter. Compared against the same period a year ago, office rents increased for the 10th consecutive quarter by a smaller 0.4%, in comparison to the 1.0% in Q1/2024,” the report added.

Here’s more from Savills:

By grades, quarterly increases were observed across offices of all grades. The largest rental growth was from Grade AAA offices, growing 0.3% QoQ to S$12.74 psf in the quarter. This came after two consecutive quarters of no rental movements. Landlords of premium offices that enjoy high occupancies and whose tenants are opting to renew their leases have an advantage to raise rents. 

Similarly, rents of Grade AA offices inched up slightly by 0.1% QoQ to S$10.54 psf after two consecutive quarters of staying constant. Grade A office rents crept up 0.2% on a QoQ basis to S$8.58 psf. 

For Q2/2024, almost all the micro-markets registered QoQ increase in rents except for Orchard Road and Shenton Way. Rents of Grade A offices in both these submarkets stayed firm in Q2/2024. For Shenton Way, this is the third consecutive quarter that rents have remained unchanged. Among the other submarkets, rental growth ranged from 0.2% to 0.4%. 

The largest increase came from City Hall, with a rise of 0.4%, a reversal from the 0.1% dip in the previous quarter. Rents of Grade A offices in Marina Bay also rebounded in Q2/2024, rising 0.3% QoQ after two consecutive quarters of decline.