Prime office rents in CBD under downward pressure amid pockets of weakness in Q2

SINGAPORE Grade-A office rents in the Central Business District (CBD) could come under downward pressure in the second half of 2023, as near-term demand will likely fall short of supply, a JLL report showed. 

While prime rents flattened in the second quarter and mostly stayed where they were in Q1, “landlords of buildings with large pockets of shadow space were starting to cave to the pressure by lowering rents to boost occupancies in the second quarter of 2023”, said Tay Huey Ying, JLL’s head of research and consultancy, Singapore.

Tricia Song, CBRE’s head of research for South-east Asia, saw certain groups of office occupiers “continue to face challenging business conditions”. Some tenants, such as those in technology, cryptocurrency and consumer banking, may be contemplating cutting office space, “potentially contributing to more shadow space in the second half of the year”.