Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley
According to a February research study report by Morgan Stanley, Singapore Grade A workplace rental fees are anticipated to continue to be stable in 2025, even as the office space industry sees healthy take-up among new developments.
An anchor renter has actually additionally been acquired for the establishment, which is said to be Manulife, Morgan Stanley’s statement includes.
Regardless, whilst workplace industry leas are anticipated to remain steady, Morgan Stanley expects rental fee reversions– referring to modifications in rents upon the finalizing of a fresh rent out– to remain in the positive single-digit range this year.
Amongst the lessees at IOI Central Blvd Towers is Morgan Stanley, the mainstay lessee of the 48-storey West Tower. Amazon is going to inhabit the whole 16-storey East Tower.
Despite the resilient take-up, Morgan Stanley anticipates office market rents to stay stable in 2025. The firm is keeping its Grade A workplace rental projection the same at $12 psf per month for this year, similar to the year just before.
IOI Central Boulevard Towers, a Grade A workplace project on Central Boulevard in the CBD, is close to entire tenancy. Last month, The Edge Singapore reported that the freshly completed project with 1.24 million sq ft of workplace is approximately 75% committed.
Earlier this month, Keppel South Central, a 33-storey business high rise in Tanjong Pagar, acquired its short slot permit. In a Feb 10 report, Keppel announced close to 50% of the office and retail place at the project was committed or being proactively worked out.
The company cites a few factors for its outlook: industry leas tracked by CBRE stayed secure in 2024 even as IOI Central Boulevard Towers has been steadily leased up. On top of that, anchor tenant rentals, on a psf basis, often tend to be lower compared to various other leases within the same structure. “So the new lease at Keppel South Central is not likely to place much higher stress on market rents,” the report checks out.
Morgan Stanley adds that a lot of the anchor lessee take-up at brand-new Grade An office complex appears to be steered by occupiers relocating from older CBD structures. This flight to quality can underpin higher openings in the second market that can cause disintegration of rental expansion as landlords lower rents to fill up such spaces, the report specifies.
