Office rents dip 1.0% in Q1

Gross effective rents now stand at $11.30 psf pm NLA.

Rental growth for Singapore's CBD investment-grade offices slowed down to 1% in the first quarter of the year.

JLL, in their Property Market Monitor Singapore report, said that is due to landlords scaling back their aggressive rent stance to focus on filling value.

The gross effective rents for these offices became $11.30 per square feet (psf) pm NLA, whilst their capital declined by 1.5% to $3,189 psf quarter-over-quarter.

Meanwhile, the market's net absorption contracted to 32.9 million square feet in the first quarter of 2023.

JLL said that it is due to more companies opting to rightsize their offices to improve cost efficiency and businesses putting expansion and relocation plans on hold to minimise capital expenditures.

JLL expected that the ongoing economic headwinds would continue to dampen business confidence and office demand in the near term.

On the other hand, competition for tenants would keep rent growth modest, while tight credit conditions would keep pressure on capital values.

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