With a decade of experience in Singapore’s commercial real estate, The executive director of Owee Commercial Real Estate, Mr. Nic Ee, highlights the latest office rental market trends in Singapore.
Singapore is a dynamic city where work demands are constantly increasing, and companies are growing at an astounding rate. Where demand is consistently increasing – there is also supply. With the growing number of foreign companies expanding to the Southeast Asia market, there has been a significant increase in the number of businesses looking to rent office space in Singapore. Its rental office market outlook for 2023 is one of the most stable in Asia-Pacific. The official data shows that Singapore’s demand for office space is expected to remain high in the coming year due to businesses and start-ups relocating to the city for its stability and financial infrastructure.
The expansion of financial institutions and the emergence of multinationals will contribute to office space demand. Most of these companies are located within the Central Business District (CBD), a financial hub that continues to be a magnet for relocation activity. Therefore, Gross rent for prime office space in the CBD is predicted to increase by 2-3% in the coming year, partly due to rising property service charges and limited new supply.
The Executive Director of Owee Commercial Real Estate, Mr. Nic Ee, known for his in-depth knowledge, solution-driven mindset, and eagle-eye approach to Singapore’s current real estate market trend, shared his insights on Singapore rental office market.
Singapore’s office real estate has been tipped as one of the hottest markets to see new entrants and the highest capital values in Asia, showing strong demand and increased investor interest. However, Businesses and individuals looking to rent office space in Singapore in 2023 may face challenges, such as high rent prices in premium locations like Marina Bay. To overcome these challenges, Ee suggests considering alternative locations like Raffles Place, which offers a wide range of offices at competitive rent prices, or shared office spaces such as serviced offices.
When asked about the demand and supply of office space in Singapore in 2023, Ee predicts, “Economic headwinds may moderate rent growth momentum, despite the strong performance in 2022. Singapore has a strong and diverse economy, and the demand for office space will remain steady in the long term. CBD Grade A office rents to grow by 2% to 5% in 2023, with the only new CBD Grade A development being the IOI Central Boulevard Towers, which is 30% pre-committed by e-commerce giant Amazon.”
The office rental market in Singapore is driven by demand from businesses, both local and foreign, seeking office space in the city. Factors that can impact on the market include economic conditions, business sentiment, and office space availability. In recent years, there has been an increase in demand for flexible office spaces in Singapore as more companies adopt hybrid work arrangements and look for more flexible and cost-effective solutions for their office space needs.
“The hybrid work arrangement, which combines remote and on-site work, has become common since the beginning of the Covid-19 pandemic in 2020. Many companies are downsizing their office space and implementing hybrid work arrangements with hot-desking zones when their leases expire to save on business real estate costs. The demand for flexible office spaces, such as shared and co-working spaces, has also increased among start-ups and multinational corporations (MNCs).” said Mr. Ee.
To provide advanced, reliable, and efficient real estate information that will help clients make informed decisions on their investments in office space, Owee Commercial Real Estate ensures clients’ office space decisions are guided by comprehensive, genuine local insight and global standards.