Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley
According to a February research review by Morgan Stanley, Singapore Grade A workplace rents are expected to remain steady in 2025, even as the office market sees healthy take-up among brand-new growths.
An anchor tenant has likewise been secured for the structure, which is claimed to be Manulife, Morgan Stanley’s report adds.
The firm cites a couple of reasons for its expectation: industry leas tracked by CBRE stayed stable last year maybe even as IOI Central Blvd Towers has been continuously leased up. Furthermore, anchor lessee rentals, on a psf basis, tend to be cheaper compared to various other leases in just the very same building. “So the new lease at Keppel South Central is unlikely to put much higher stress on market leas,” the record reads.
IOI Central Blvd Towers, a Grade A business office development on Central Boulevard in the CBD, is nearing full tenancy. Last month, The Edge Singapore reported that the freshly finalized development with 1.24 million sq ft of workplace is approximately 75% committed.
Previously this month, Keppel South Central, a 33-storey business high rise in Tanjong Pagar, acquired its short occupation permit. In a Feb 10 statement, Keppel declared nearly 50% of the office and retail spot at the project was dedicated or being proactively negotiated.
Amongst the renters at IOI Central Boulevard Towers is Morgan Stanley, the mainstay renter of the 48-storey West Tower. Amazon is going to inhabit the entire 16-storey East Tower.
Morgan Stanley adds that significantly of the anchor renter take-up at new Grade An office complex seems steered by occupiers moving from older CBD buildings. This flight to quality might underpin greater vacancies in the secondary market that could result in disintegration of rental expansion as property owners lower rents to fill up such areas, the record clarifies.
Regardless, while office market leas are anticipated to continue to be steady, Morgan Stanley expects rent reversions– referring to changes in rents upon the finalizing of a new contract– to remain in the favorable single-digit range this year.
Despite the resilient take-up, Morgan Stanley expects workplace market rental fees to stay steady in 2025. The firm is keeping its Grade A business office rental foresight the same at $12 psf monthly for this year, similar to the year before.
