CBD Grade A office demand up more than 8x in 2021
This is according to Cushman & Wakefield’s latest Market Beat research report.
Cushman & Wakefield’s latest research report revealed that CBD Grade A office demand was up more than eight times to reach 0.8 million square feet (msf) in 2021.
The report, which looks into the performance of the Singapore office property market in the fourth quarter (Q4) of 2021, also took into account both the key drivers of demand and the outlook going forward.
In this case, the report points to a move towards quality office space, with technology and financial sectors leading the charge. At least 72% of new leases within the CBD in 2021 were made up of these branches, according to C&W’s database.
“Technology and financial sectors continue to fuel office demand. Singapore’s attractiveness as a tech and financial hub and strong growth prospects of Asia’s digital economy. These sectors are expected to continue to increase headcount and drive expansion in 2022,” said Mark Lampard, Executive Director and Head of Singapore Commercial Leasing at Cushman & Wakefield.
Other sectors are also expected to contribute to this performance, following 2022’s improvement in business conditions and economic recovery.
A prediction of an additional 4.6% in office demand is expected to help aid rents in the area.
“Office demand could also pick from other sectors which have been battered by the pandemic, as business conditions improve in 2022 amidst a sustained economic recovery and continued increase of business activities. Overall, resurgent office demand and tight supply are expected to propel CBD Grade A office rents by 4.6% in 2022 alongside expected tightening vacancy rates,” said Wong Xian Yang, Head of Research, Singapore at Cushman & Wakefield.
Quarter-on-quarter, CBD Grade A office rents rose by 1.7% in Q4. This logged a higher growth rate than the quarterly growth of 0.5% for the previous two quarters. Year-on-year (YoY), rents increased by 2.3% to $9.81 per square foot per month, with the Marina Bay submarket leading at a 4.9% YoY growth.