SINGAPORE - Office rents in Singapore reached a 15-year high in the first quarter, defying the commercial property slump plaguing other major financial hubs.

Gross effective monthly rents for premium office space in the Central Business District jumped to $11.42 per sq ft in the first three months of 2024, according to data released on March 27 by Jones Lang LaSalle (JLL). That is the most since the last quarter of 2008 and reverses a drop of 0.5 per cent in the prior two quarters.

Singapore has so far avoided a major downturn in the commercial real estate market, which is hitting the largest Western cities and regional rivals such as Hong Kong. The strength is underpinned by a widespread return-to-office push and a boom in private wealth.

Mr Andrew Tangye, head of office leasing and advisory for JLL Singapore, said in a statement: “Inquiry levels have risen, and these are stemming from firms in professional and financial services as well as the consumer goods sectors.”

In addition, vacancies for prime office space reached a post-pandemic low of 5.3 per cent in the first quarter, compared with 5.5 per cent in the three months before, according to the data.

Most leasing activity is still from small to mid-sized tenants, while large occupier demand remains weak, Mr Tangye said. For instance, Meta Platforms will cut space in Singapore in the second half of 2024.

JLL estimates that tenants have not been secured for more than 1.5 million sq ft of office space coming online in 2024 and 2025.

More than three million sq ft of office space will be completed in 2024, according to Urban Redevelopment Authority estimates. That is more than three times the amount that entered the market in 2023. BLOOMBERG