Office segment remains on an ‘even keel’ driven by flight-to-quality demand

Knight Frank said occupancy levels of CBD offices are 94%-95%.

The occupancy rates in the Raffles Place / Marina Bay precinct and in the overall Central Business District (CBD) remained steady and healthy in the first quarter (Q1) of 2023, Knight Frank said.

These numbers were broadly unchanged from the previous quarter’s occupancy levels.

The property expert said the occupancy levels in Raffles Place and the overall CBD were at 95.4% and 94.1%, respectively.

Quality office spaces were still full as businesses continued to relocate headquarters functions to Singapore, with the city-state a “flight-to-safety” hub amidst seemingly unrelenting global disruptions, said Knight Frank.

Rent prices in Raffles Place / Marina Bay precinct grew 1.3% quarter-on-quarter (QoQ) to $10.83 psf pm in Q1 2023. 

“As the supply of new office inventory continues to remain tight, especially in the CBD, the upward rental trend continued to reflect a resilient market,” said Knight Frank.

Knight Frank, meanwhile, said the increase in Q1 2023 shows that office rents remain stabilised due to the flight-to-quality demand.

It added that the prime office rents are expected to be stable with an increment to be around 3% for the whole of 2023.