Growth in CBD Grade A office rents likely to continue in 2022
THE growth in Central Business District (CBD) Grade A office rents in the last quarter of 2021 is likely to continue in 2022 and build traction for Singapore's office market, said investment management firm Colliers on Tuesday (Feb 15).
In its Office Market Outlook 2022 report, the firm said CBD Grade A rents will grow around 4.4 per cent in 2022, compared to the 0.8 per cent rise in 2021, along with vacancy rate tightening to just under 4 per cent.
This comes on the back of limited new supply coming on stream and the removal of ageing office stock for redevelopment, barring the emergence of downside risks that could derail economic recovery, Colliers said.
It also noted that leasing momentum for this sector will strengthen further through heightened emphasis on flight-to-quality, sustainability and wellness among the office spaces.
The year 2021 had concluded with positive market sentiments in the prime office market, with Grade A rents rising by 0.5 per cent quarter on quarter in Q4 to S$9.64 per square foot (psf).
Leasing demand in the segment has also been resilient, said Colliers. CBD Grade A saw net absorption of 373,000 square feet (35,000 square metres) and its vacancy rate lowered by 1.3 per cent to 5 per cent in Q4 2021, as occupiers started to move into the recently completed CapitaSpring on Market Street.