Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley
According to a February research record by Morgan Stanley, Singapore Grade A workplace leas are anticipated to remain stable in 2025, even as the office market sees healthy take-up amongst new developments.
Morgan Stanley includes that much of the anchor renter take-up at brand-new Grade An office buildings seems generated by occupiers relocating from older CBD structures. This flight to quality could underpin greater vacancies in the alternate market that could cause disintegration of rental improvement as property managers lower rents to fill up such spaces, the report specifies.
An anchor occupant has additionally been guaranteed for the building, which is said to be Manulife, Morgan Stanley’s statement adds.
Regardless of the resilient take-up, Morgan Stanley expects workplace market rents to stay stable in 2025. The company is maintaining its Grade A workplace rental forecast unmodified at $12 psf per month for this year, identical to the year just before.
In any case, whilst office market rents are foreseed to stay steady, Morgan Stanley anticipates rent reversions– referring to modifications in rental fees upon the finalizing of a new lease– to remain in the positive single-digit range this year.
The company cites a couple of reasons for its overview: industry rental fees tracked by CBRE stayed steady in 2024 even as IOI Central Boulevard Towers has actually been steadily leased up. Additionally, mainstay occupant rents, on a psf basis, tend to be cheaper contrasted to other leases within the exact same structure. “So the brand-new lease at Keppel South Central is not likely to put much upward pressure on market leas,” the report reads.
Earlier this month, Keppel South Central, a 33-storey business tower in Tanjong Pagar, achieved its short-term slot permit. In a Feb 10 statement, Keppel declared nearly 50% of the office and retail space at the project was committed or being actively negotiated.
Among the occupants at IOI Central Boulevard Towers is Morgan Stanley, the anchor occupant of the 48-storey West Tower. Amazon is going to occupy the whole 16-storey East Tower.
IOI Central Boulevard Towers, a Grade A workplace project on Central Blvd in the CBD, is nearing entire occupancy. Last month, The Edge Singapore disclosed that the recently finalized development with 1.24 million sq ft of workplace is approximately 75% committed.
