Singapore’s prime office and retail rents continue upwards trajectory

SINGAPORE: Commercial rents have continued rising, with prime office rents hitting its 11th consecutive quarter of increase while retail rents are set to go up by four per cent.

Prime office rents

Real estate consultancy Knight Frank notes that “the prime office market’s rental growth cycle extended to become the longest in the country’s history.” While the growth pace experienced a slowdown in the second half of 2023, the overall trajectory remains positive.

As of the fourth quarter of 2023, the prime office vacancy rate in the city stood at a modest 4.4%, with year-on-year growth reaching 4.1%. Looking ahead, Knight Frank anticipates further growth in office rents over the next 12 months.

Prime retail rents

Switching gears to the retail sector, Knight Frank’s insights point towards positive developments. The retail property sector in Singapore is poised to benefit from an upswing in tourist arrivals and a sustained demand for prime locations.

In 2024, Knight Frank predicts prime retail rents to rise by a significant margin, ranging between 2% to 4%. This optimistic outlook is underpinned by the “normalisation” of travel patterns, returning office activities, and post-pandemic recreational activities.

Notably, popular malls in both Orchard Road and suburban areas continue to boast tight occupancy levels. Knight Frank said that these healthy levels are expected to persist throughout 2024, providing a stable foundation for retail growth.

Knight Frank also noted that existing retailers are reportedly eyeing new locations for expansion, “at the same time, international brands look to set up new presence in Singapore to tap into the growing affluence and consumer strength of middle-class societies in Southeast Asia.”

/TISG

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