Rents Prime Office Space Singapore 21 Higher Wider Grade Stock Savills
Savills’ latest Prime Office Costs report reveals that Singapore maintains its position as the seventh most expensive city for office space, as of the second quarter of 2024. The analysis shows that annual net effective occupier costs, which include rent and fit-out expenses, for prime offices in Singapore reached US$146.07 psf (equivalent to $193 psf) last quarter, marking a 0.3% increase compared to the first quarter of 2024.
Leading the list is London, with an annual net effective occupier cost of US$283.57 psf (up 4.2% q-o-q), followed by Hong Kong at US$230.93 psf (down 1% q-o-q) and New York Midtown at US$202.72 (up 3.7% q-o-q). The report also reveals that prime office rents in Singapore are 21% more expensive than Grade-A office stock in general. According to the report, prime offices are considered to be the top tier of Grade-A office spaces, typically commanding the highest 5% to 10% of rents in the market.
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In terms of premiums above broader Grade-A stock, prime offices in North America recorded the highest figure of 62.5% in the second quarter of 2024. In the Asia Pacific region, the premium stood at 33.7%, supported by small differentials in markets such as Sydney, Seoul, and Singapore. The report notes that in these markets, offices in high-quality downtown buildings are already comparatively expensive, and prime stock may not offer enough amenities or prestige to warrant high premiums.
Meanwhile, the Europe, Middle East, and Africa region registered a low premium of 17.9%, attributed to rising rents across the broader Grade-A markets. On the other hand, some Chinese markets saw price premiums exceeding 70%, driven by strong demand for top-tier office space.
According to Savills, tenants are likely to continue their preference for prime offices throughout the year, despite the increasing fit-out costs and macroeconomic uncertainty. “Although gross rental rates are easing in some markets from record highs, there is still a strong demand for top-tier prime office space, which will support prime rents in the future,” adds the report.