Demand and prices for Grade A office space in the CBD continue to rise steadily as the Singapore market actively and fully opens up and various business activities recover.

Demand is mainly coming from corporate relocation in the Asia Pacific region and the establishment of new headquarters and new technology companies in Southeast Asia, as well as a large number of family offices and private foundations.

Office leasing activity over the past nine months is a testament to the importance of office space for business growth. Even with the aggressive promotion of flexible office models during the epidemic, offline physical office space remains the best place to spread company culture and values, and to communicate and collaborate deeply.

In the third quarter of this year, office rents in Singapore surpassed their pre-epidemic highs and reached a 14-year high, a figure that is expected to continue to climb in the coming years.

According to JLL, Grade A office rents in the CBD have now reached an average price of S$11.06 per square foot per month, coming out of the epidemic trough in just 18 months.

The highest point before the outbreak occurred in the fourth quarter of 2019 at an average price of S$10.81 per square foot per month. The previous high was an average price of S$12.55 per square foot per month.

Rents in the CBD consist of four locations - Marina Bay area, Raffles Place, Pasir Risantoon Road/Tanjong Pagar and Marina Centre - with the highest rents concentrated in Marina Bay at an average price of S$12.80 per square foot per month, followed by Raffles Place and Marina Centre, with little difference at S$10.74 per square foot per month and S$10.47 per square foot per month respectively.

In terms of YoY growth, Marina Bay performed well, with increases of over 3% in both Q1 and Q2, after a slight decline in the previous quarter. Raffles Place grew by 5.1% last quarter with great potential.

Growth in Patuxent Road/Tanjong Pagar has been steady, and Marina Centre had an excellent growth of 3.1% last quarter.

According to Knight Frank, the lowest vacancy rates are on the edge of downtown, 2.3%, in Alexandra/Portland and Novena/Newton.

The lowest vacancy rates in the CBD are in Raffles Place and Marina Bay's super Grade A office space at 2.8%, while older Grade A office space in the same area is much worse with 8.6% vacancy.

Orchard Road, Marina, Beach Road vacancy rate of 4.2-4.7% Eight Sandton Road / Tanjong Pagar vacancy rate of 8.4%.

According to Knight Frank Lai, in 2022, new office space is expected to increase by another 1,176,614 square feet, mainly from Guoco Tower, Hub Synergy Point and Surbana Jurong Campus, the first two of which are located in the central core.

Supply is expected to increase by 1,555,848 square feet in 2023 and 1,871,500 square feet in 2024.