Quality office spaces attract tenants despite economic challenges

• Despite ongoing economic uncertainties, including potential policy shifts under the Trump 2.0 administration, leasing activities in quality office developments improved in Q4 2024 as occupiers sought to upgrade and refresh their office setup.
• Commitment levels in the recently completed IOI Central Boulevard Towers rose to 75%, with new sign-ups, including Allied World Assurance, Linklaters and Qube Research & Technologies, capitalising on the availability of high-quality space.

Keppel South Central – the sole CBD office completion in 2025

• No new CBD office development was completed in Q4 2024. Keppel South Central is set to be the only CBD office project completion in 2025.
• On the withdrawal front, 39 Robinson Road will be removed from stock in 2025 for major refurbishment. This could mitigate some of the supply pressure from the completion of Keppel South Central and other released spaces from tenant relocations.

Office rent and capital value growth hiatus continues through Q4 2024

• Office rents stayed flattish for the second consecutive quarter as landlords prioritised tenant retention and vacancy reduction over rental growth.
• Capital values also stayed relatively flat in Q4 2024 as subdued rental growth and still elevated interest rates kept institutional investors on the sidelines.

Outlook: Rents and capital values to remain subdued in H1 2025 but are poised for an upturn in H2 2025

• Continued economic expansion is expected to drive business growth and increase hiring, potentially boosting office space demand in H2 2025. This demand will be further propelled by the ongoing flight-to-quality and return-to-office initiatives.
• Rents and capital values should remain stable in H1 2025 but are set for a recovery in H2 2025 amid successful capital-raising efforts, lower interest rates, and strengthening occupier demand.