Singapore Office Market Forecast 2023
Most market watchers expect office rents to advance next year but below initial projections of 6% to 8%. We are now more likely to see growth of around 4% to 6% in 2023. Asking rates for the top premium grade A buildings have risen to around $14.00 to $15.00 per sq ft. How much room there is to negotiate on these rates depends upon the size of the unit involved. The mid-tier market between $8.00 per sq ft and $10.00 per sq ft will remain the most active.
Not only are base rents expected to firm but it is widely anticipated that service charges will be increased, but these have not fully kicked in yet. Most affected will be tenants in those buildings which haven’t seen an adjustment in service charge for a long time. Tenants should also factor in an impending increase in GST (Goods and Service Tax). This will increase from 7% to 9% phased in over a two year period. The first phase will be an increase to 8%, effective from 1st January 2023 and the next phase to 9%, effective from 1st January 2024.
