Office Rents Stabilise in Q1, Colliers Says

April 7, 2021 – Colliers Research  said CBD Grade A rents in Singapore stabilised in the first quarter of the year, indicating that rents in the country have reached the “inflextion point” during the quarter. 

CBD Grade A rents declined only by 0.3% quarter-on-quarter to SGD 9.54 per sq ft. The decline was largely due to Orchard’s0.9% quarter-on-quarter decline and Raffles Place/New Downtown Premium’s 0.7% quarter-on-quarter decline.

“Landlords are increasingly more confident of renting their space out, with rental increases witnessed in selective buildings. Occupiers should take this opportunity to lock in leases early as rents hit an inflexion point,” June Chua, Executive Director, Colliers Head of Tenant Representation said. 

Meanwhile, new demand is being driven by the technology sector, including Bytedance, which expanded another floor at One Raffles Quay South Tower (almost 32,000 sq ft), in addition to committing two floors at Guoco Tower. The expansion is inline with their goal to ramp up recruitment and plan to build their Asia Hub in Singapore.

“With new demand driven by the Technology sector, CBD Grade A office net absorption turned positive in Q1 2021 after two consecutive quarters of contraction. This is a sign of recovery, and we can expect rents to rebound 5.5% by end-2021, in line with the GDP growth, as supply stays at benign levels,” Tricia Song (宋明蔚), Head of Research for Singapore at Colliers said. 

Colliers expects key operators to continue their expansion at a moderate pace. 

“Last year’s events brought a multitude of changes and disruptions in the workplace. While occupiers have to rationalise their portfolio, this will lead to higher take-ups from the flexible workspace sector,” Chua said.