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Office rents pivot

  • As expected, CBD Grade A rents stabilised in Q1 2021, declining only 0.3% QOQ to SGD9.54 per sq ft;
  • We maintain our positive outlook in the office sector, and rent forecast to rebound 5.5% by end-2021, in line with the GDP growth, as supply stays at benign levels;
  • Office demand to continue being driven by the Technology sector;
  • Key flexible workplace operators to continue their expansion at a moderate pace;
  • Total office or mixed office investment volumes rose 13.9% YOY to SGD850 million in Q1 2021 as investor confidence improved with the global vaccine roll-out;
  • Long term capital value growth of 3.0% p.a. expected , relatively in line with the expected long-term rental growth of 3.7%.


SINGAPORE, 6 April 2021 – Colliers (NASDAQ and TSX: CIGI), a global leader in commercial real estate services, has released its Singapore office quarterly report for Q1, Office Rents Pivot, which examines the performance of the Singapore office property market in Q1 2021 and its prospects ahead.  


Evaluating the data, Colliers Research notes that CBD Grade A rents stabilised in Q1 2021, declining only 0.3% QOQ to SGD9.54 per sq ft, dragged mainly by Orchard (-0.9% QOQ) and Raffles Place/New Downtown Premium (-0.7% QOQ) micro-markets.

June Chua, Executive Director, Head of Tenant Representation at Colliers, said: " Landlords are increasingly more confident of renting their space out, with rental increases witnessed in selective buildings. Occupiers should take this opportunity to lock in leases early as rents hit an inflexion point."

Tricia Song (宋明蔚), Head of Research for Singapore Colliers, added, " With new demand driven by the Technology sector, CBD Grade A office net absorption turned positive in Q1 2021 after two consecutive quarters of contraction. This is a sign of recovery, and we can expect rents to rebound 5.5% by end-2021, in line with the GDP growth, as supply stays at benign levels."

New demand was driven by the Technology sector, including Bytedance, which expanded another floor at One Raffles Quay South Tower (almost 32,000 sq ft), in addition to committing two floors at Guoco Tower, as they ramp up recruitment and plan to build their Asia Hub in Singapore. 

Ms Chua added, "Last year's events brought a multitude of changes and disruptions in the workplace. While occupiers have to rationalise their portfolio, this will lead to higher take-ups from Flexible Workspace sector. We expect key operators to continue their expansion at a moderate pace. JustCo's expansion with  new centres expected at Razer SEA HQ business park and Asia Green in Q3 2021 (each about 30,000 sq ft) is a great testimonial."


Office rents and vacancy, Q1 2021


Average Gross Effective Rents
(SGD psf pm)

QOQ Change (%)

YOY Change (%)

Vacancy (%)

Grade A (Premium Tier)





Raffles Place / New Downtown





Grade A

Raffles Place / New Downtown





Shenton Way / Tanjong Pagar





City Hall





Beach Road / Bugis





Orchard Road





CBD Grade A

 9.54  -0.3%  -5.7%* 5.0%
City Fringe 7.30 -1.2% -6.6% 4.6%
 Suburban 4.89 -1.3% -5.1%* 6.5%
Grade B
Raffles Place
8.22 0.0% -6.7% 5.5%
Shenton Way / Tanjong Pagar 7.73 -0.6% 6.4% 5.6%
Beach Road / Bugis 7.60 -0.7% -5.2% 6.2%
Orchard Road 7.76 -1.8% -10.6% 15.3%
CBD Grade B Average 7.83 -0.4% -7.3% 7.2%
City Fringe 7.30 -0.9% -5.3% 9.8%
Suburban 4.89 0.0% 0.0% 15.8%

Source: Colliers 
Note: Average gross effective rents are benchmarked to a full-floor space in mid-zone level; conservative figure tending towards lower-end of rental range for a property. Effective rent refers to average rate payable over the lease term after accounting for incentives.
* On a like-for-like basis

Investment sales

Total office or mixed office investment volumes rose 13.9% YOY to SGD850 million in Q1 2021, as confidence returned with the global vaccine roll-out.  

Jerome Wright, Senior Director, Capital Markets and Investment Services in Singapore at Colliers International, said, " The Allianz Real Estate acquisition of a 50% interest in OUE Bayfront from OUE Commercial Real Estate Investment Trust for SGD633.8 million (equating to SGD3,170 per sq ft) reflects once again the long-term attractiveness of Singapore to foreign investors and appetite for high-quality premium and Grade A office buildings. "

Notable Office Transactions


Price (SGD million)



Remaining Tenure

Capital Tower

1,267.5 3,170

Raffles Place/New Downtown

99 years from 2007
Certis Cisco Centre 150 1,152*

City Fringe

30 years from 2013
The Central 41.7 3,130 City Fringe

99 years from 2001

Source: Colliers  *price on land

Keng Chiam Tan, Executive Director, Head of Valuations at Colliers, commented on the Grade A capital values: "The average imputed capital value of CBD Grade A office properties stayed flat QOQ in Q1 2021 at SGD2,436 per sq foot. In Q1 2021, cap rates remained between 3.00% and 3.50%. We expect long term capital value growth to be between 2.00% and 3.00% p.a., relatively in line with the long-term rental growth of 3.7%, on low-interest rates and the increasing weight of capital allocation to gateway cities in Asia."

Download our quarterly investment sales report for Q1 2021 here.



Media Contact:

Annabelle Taylor