Monthly rents for premium office space in Singapore rose 8.4 percent in the first quarter to S$17.35 per square foot (psf) from the previous quarter, driven up by demand from banks and other financial institutions, property consultant Jones Lang LaSalle said Monday.
The first-quarter increase was slightly higher than the fourth quarter’s 7.4 percent rise in monthly rents for grade-A office space in the central business district.
Grade-B office rents jumped 11.2 percent to S$13.90 psf in the first quarter from S$12.50.
‘While Singapore office rental growth in the first quarter is some cause for optimism in this uncertain market condition, the increase in rental value is largely a spillover from the previous quarters,’ said Chris Archibold, head of commercial leasing at Jones Lang LaSalle.
‘The supply environment will remain in the landlord’s favor for a few more quarters before any significant increase in supply tilts the balance towards the occupiers,’ he said.
There is still room for moderate growth over the next 6-9 months, Archibold said.
The lack of available office supply in the near term, coupled with moderate growth in demand, will put mild pressure on rents, Jones Lang LaSalle said.
How the leasing market behaves in the next six months will set the tone for the central business district core office market, said Archibold.
There is concern that a supply glut in CBD office space in the next 2-3 years may cause rents to soften.