APPD Market Report Article


May 26, 2024

Michelle Tee, Director, Research & Consultancy, Singapore


SGD 11.42


Occupier sentiment improves amid nascent economic recovery

  • Enquiry levels picked up in 1Q24, stemming from firms in the professional & financial services as well as the consumer goods sectors. The majority of leasing activity continued to be driven by small- and medium-sized occupiers in newer and higher-quality buildings.
  • Cybersecurity firm Datadog secured a floor at South Beach Tower, while private equity firm HQ Capital opened a new Singapore office at OUE Bayfront to serve the growing base of private wealth and institutional investors in the region. Additionally, FedEx has officially opened its new regional headquarters at Centennial Tower to support its operations in Asia Pacific, the Middle East and Africa. 

Opportunities for tenants seeking quality options

  • No new Investment Grade office buildings were completed in the CBD in 1Q24. The anticipated completion of IOI Central Boulevard Towers (1.3 million sq ft) in 2Q24 is expected to be the only new addition to the CBD’s building inventory in 2024.
  • The remaining uncommitted space at IOI Central Boulevard Tower, together with other upcoming office projects scheduled to complete in 2025, such as Keppel South Central (0.6 million sq ft) and the redevelopment of Shaw Tower (0.4 million sq ft), will offer over 1.5 million sq ft of office space for tenants seeking new space options.

CBD rent hits 15-year high in 1Q24

  • CBD office rents turned around in 1Q24 after edging down for the past two consecutive quarters. The uptick in rents to a 15-year high was driven by tightened vacancy and competition among the small and medium-sized occupiers who were willing to offer higher bids to secure their preferred spaces in newer and better-quality buildings. 
  • Underpinned by a strengthening outlook for the office leasing market, CBD Investment Grade office capital values firmed in 1Q24 after falling for five consecutive quarters.

Outlook: Cautious optimism for rent growth and price appreciation

  • Should Singapore’s economy continue to recover and occupier sentiment remain positive, take-up of office space could improve amid pent-up demand. This should support a continued uptick in rents, although the pace of growth will be measured in light of the competition for tenants, given the substantial near-term supply.
  • The impending interest rate cuts, coupled with a brightened outlook for the office leasing market, could drive a nascent recovery in capital values.

Note: Singapore Office refers to Singapore's CBD Grade A office market in Marina Bay, Raffles Place, Shenton Way and Marina Centre.

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