In Singapore, as more employees return to the workplace, the prime office rental yield concludes the year on a high note. According to real estate specialists, the rents will continue to rise in 2023.
In the Central Business District (CBD), Grade A office rents reached $11.70 per square foot per month in the most recent quarter, marking the seventh straight quarter of growth. It raises the full-year growth to 8.3%, significantly higher than the 3.8% growth in 2021.
The average price for Capital and Integrated Commercial Trust’s (CICT) Singapore office leases signed was 7.9% higher than the average rent for leases ending in the first nine months of 2022, while the occupancy rate as of September 30 was 96.6%, up from 91.76% at the same time in 2021.
The CICT’s average office rentals increased from $10.07 per square foot in 2021 to $10.52 per square foot in 2022 because of the higher committed occupancy at Capital Tower, Six Battery Road, and Asia Square Tower 2.
According to a CDL representative, office rental yield increased by between 2% and 12% in 2022 compared to 2019 and committed occupancy increased by about 5% across its wholly-owned assets in the CBD, including Republic Plaza, City House, and King’s Centre.
Expected office rental yield in 2023
It is predicted that despite interruptions from the IT industry, the market will stay strong as more Chinese businesses relocate to Singapore for a more stable business climate and workers continue to return to the workplace.
Although layoffs at IT businesses have lately made the news, it is believed that many of these companies can cling on to their space – having committed to their contract – and are unlikely to disrupt the office property market and theoffice rental yield.
Nicholas Mak, the director of research and consultation at ERA Realty, predicted that even though the country’s economic development may stall in 2023, more jobs will be added, and the labour market will be more favourable.
I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.
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