Central Boulevard Towers Office2

According to JLL, Singapore’s office rents are expected to rise in 2021, “potentially culminating in a full-year increase of 2 to 3 percent.”

The monthly gross effective average rentals of Grade A CBD office space rose 1.2 percent quarter on quarter in 2021 to $9.90 per sq ft, from $9.79 in 1Q2021, according to the report.

“This is a good indication that office rents have begun to rebound after two straight quarters of slowing rent correction,” the report says.

According to Andrew Tangye, head of office leasing & advising, JLL Singapore, leasing activity has stepped up, with demand coming from growing sectors such as family businesses, technology, Healthcare, and wealth management.

As of 2Q2021, 70% or more of the 0.8 million sq ft of office space scheduled to open in 2021 from new skyscrapers like Afro-Asia and Capita Spring had already been leased.

“The successful containment of the Covid-19 virus, which resulted in Singapore’s economy reopening in Phase Three on December 28, 2020, as well as the roll-out of the vaccination program, have raised occupier confidence and improved market sentiment,” says Tay Huey Ying, JLL Singapore.

“As a result, corporate downsizing has halted, and some companies have been encouraged to expand or open headquarters in Singapore. “Rent increase in 2Q21 has been fueled by increasing demand,” she says.

“Demand for office space is anticipated to rise as the global economy improves and Singapore’s attractive offers become more appealing,” Tay adds.

Since peaking at $10.81 psf/month in 4Q2019, Grade A CBD office rentals have fallen a modest 9.5 percent. However, according to JLL, this is just a “fraction of the 56.5 percent drop in six quarters from 2Q2008 to 4Q2009 owing to the effect of the Global Financial Crisis (GFC).”

Investors have also put 270 percent more money into the industry in 2020 than they did during the Great Recession. Investors have purchased $1.71 billion in Singapore office properties so far this year, which is equal to 76 percent of the total office sales volume in 2020.