_Office Market Update Q1 2024

Renewals support office rents

April 23, 2024

Occupancy levels in the Raffles Place / Marina Bay precinct and in the overall CBD remained tight at 95.6% and 94.7% respectively in Q1 2024, largely unchanged from the previous quarter. The tight occupancy levels in the quarter were supported mainly by renewals at slightly higher levels from previous positions, as most businesses that already occupy quality spaces resisted relocation and/or expansion, and instead, continued to operate in existing premises.

Singapore’s appeal to the international business community has remained intact as multinational corporations (MNCs) continued to locate its regional headquarters to the city-state, with many citing the wide pool of talent, tax incentives, a diversified economy and modern infrastructure. One example is FedEx, which recently opened a new regional headquarters, occupying 29,000 sf of space in Centennial Tower, to maximise the strategic location of Singapore in the growing supply chain market in Southeast Asia. The International Energy Agency (IEA) will also open its first office outside of its headquarters in Paris in Singapore, to serve as a hub for its activities and engagements in the region. In a report by Bloomberg Intelligence, Singapore hosted 4,200 MNCs in 2023 compared to the 1,336 MNCs found in Hong Kong in the same period, emphatically highlighting Singapore’s popularity as a headquarters destination.

Headline news of global retrenchment exercises at various MNCs continued to surface, especially in the technology sector. Based on a labour market report released by MOM, retrenchments rose to 14,590 in 2023 from a record low of 6,440 the previous year, with sectors from IT services, Wholesale Trade and Electronics Manufacturing making up the bulk, as these sectors were most affected by global economic headwinds. However, the overall annual average unemployment rate in Singapore remained low and stable at 1.9% in 2023, lower than the 2.1% and 3.0% recorded in 2022 and 2020 respectively. The re-employment rate for residents in 2023 was a sturdy 63.7%.

Full report here