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Core CBD Premium and Grade A Rents extend their growth to reach S$11.40 per sq ft in Q4 2022

Colliers Research, Office, Office Rents, Office Sales

The office market may be facing some undercurrents which might go against the growth momentum

Singapore, January 5, 2023 – Leading diversified professional services and investment management firm Colliers (NASDAQ and TSX: CIGI) today releases its Q4 2022 Singapore Office Market Report. Key highlights include:

  • Rents for Core CBD Premium and Grade A office segment registered a 0.9% quarter-on-quarter (QoQ) growth to reach S$11.40 per sq ft.
  • Leasing activities for the Core CBD Premium and Grade A office segment rebounded in Q4, bringing the total net absorption for this segment to more than 500,000 sq ft for FY2022.
  • The vacancy rate for Core CBD Premium and Grade A office segment tightened to 2.3%, due to a tight supply.
  • Average capital values for Core CBD Premium and Grade A office segment increased by 1.7% QoQ, to S$3,050 per sq ft.
  • Full-year 2023 rental growth for the core CBD Premium and Grade A segment is forecast to ease by between 2% and 3% year-on-year (YoY).

In Q4 2022, Core CBD Premium and Grade A office rents continued their growth trajectory to reach S$11.40 per sq ft, registering a 0.9% QoQ growth and a 5.9% YoY growth, largely driven by the addition of new high-quality Grade A buildings to the Raffles Place/New Downtown submarket. This is the highest YoY growth registered since 2019.

Notably, Fringe CBD Grade A Beach Road submarket rents reached S$9.60 per sq ft, a healthy 6.7% QoQ growth brought about by the introduction of Guoco Midtown into the submarket.

Core CBD Premium and Grade A - Demand, Supply and Vacancy

 2023 01 05 Q4 2022 Office Report_Demand Supply Vacancy

Source: Colliers

Q4 2022 Office Rents and Vacancy

(S$ psf pm)




Core CBD Premium & Grade A










Raffles Place/New Downtown





Shenton Way/Tanjong Pagar





Fringe CBD Grade A





City Hall





Beach Road/Bugis





Orchard Road





City Fringe










Source: Colliers

The availability of high-quality offices in the Core CBD remained tight due to a lack of new supply and withdrawal of existing office stock for redevelopment. It is likely to remain a landlord’s market for the first half of the year with most building owners expected to maintain their asking rents. 

The changing economic outlook and drought in funding has led to a slowdown in demand from technology firms. Tech firms have switched their focus from growth to profitability and hence, many are either putting their expansion plans on hold, reducing their footprints, or withdrawing from prior commitments. 

This trend is likely to extend to other sectors, particularly the financial sector, which could result in an emergence of more shadow space in the market, thereby capping rental growth. However, given the current tight supply situation, it is likely that this shadow space would be backfilled by other industries like business services or new entrants.  

As Singapore is well-placed by companies and foreign investors as an attractive destination for business and investment, this has given rise to demand for ancillary business services. Law firms, management consultancies, insurance companies and accounting firms are expanding their operations, and this will, to a certain extent, lend support to market demand.

With leasing activity slowing and should there be a sharp downturn in the current economic conditions, landlords might need to prioritise occupancy and offer more competitive incentives and/or rents. 

Mr Bastiaan van Beijsterveldt, Executive Director and Head of Occupier Services, Singapore at Colliers says, “Even though cost management will be a priority for most firms this year, it is still important for employers to consider their talent retention and attraction strategy. Securing the right office space as well as adapting offices to a different way of working and future-proofing premises from an ESG perspective are important considerations that companies should dedicate efforts to, to provide a conducive and enjoyable work environment for their staff.”

“In an effort to improve work productivity, we have observed that more companies are exhibiting their desire to bring employees back into the office and we expect this trend to gain momentum in 2023. The need for high-quality and well-thought-out spaces with ample amenities to make returning to work more attractive as well as for employees to work efficiently will become even more relevant,” adds Mr van Beijsterveldt.

“A return-to-office arrangement would contribute to a more optimistic outlook towards future office demand. However, given the current economic uncertainties, companies are also embarking on a right-size option or are in a holding pattern, with some exiting from long-term leased space in favour of a shorter lease or a more flexible arrangement. Net office absorption for the core CBD Premium and Grade A segment is forecast to reach 679,000 sq ft for the full year.

“Landlords will need to adapt to these new market dynamics and adopt a more tenant-centric approach in the new year. The focus could shift towards allocating more space within the building for shared amenities as well as offering highly tailored lease packages for large requirements as part of their strategy to retain existing tenants and attract new ones,” says Mr van Beijsterveldt.

Ms Catherine He, Director and Head of Research, Singapore at Colliers says, “Following a 5.9% rental growth for 2022, we expect full-year 2023 rental growth for the core CBD Premium and Grade A segment to ease to between 2% and 3% YoY.”

Due to the positive rental growth and tight supply, the average capital values for Core CBD Premium and Grade A offices grew by 1.7% QoQ to S$3,050 per sq ft in Q4 2022. With the rise in borrowing costs and narrowing of yield spreads, office transactions will likely be dominated by strata offices, where the price quantum is more manageable, and which attracts mainly private wealth where typically minimal leverage is deployed.

“Although most global investors are generally underwriting yield expansion over the next few quarters as they adjust to a period of slower growth and higher capital costs, Singapore’s Grade A office capital values are likely to remain well-supported by the strong holding power of institutional landlords, tight occupancy, rental growth, as well as keen investor interest in quality core assets due to Singapore’s safe haven status.” says Ms He.  


View our Q4 2022 Office Market Report here.

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Bastiaan VB

Managing Director | Singapore

MD's Office


Bastiaan is the Managing Director for Colliers in Singapore. His responsibilities include the strategic direction of the Singapore office, to lead the growth and diversification initiatives, ensure superior service delivery and develop market leading teams. He oversees all business lines including Capital Markets, Investment Sales, Occupier Services, Valuations & Advisory, Industrial Services, Hotel Advisory, Research, as well as Marketing & Communications and the Human Resources and Finance Teams.

Pertinent to this assignment Bastiaan was the Head of Occupier Services in Singapore and has led complex transaction projects for diverse global multinationals and investors throughout the entire Asia-Pacific region.

In Asia - Pacific, Bastiaan lived and worked in; Singapore, Hong Kong, South Korea, Malaysia and Australia.

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Catherine He

Head of Research



Catherine started her career as an Investment Analyst at IFC, the investment arm of the World Bank group, where she participated in the screening, due diligence, financial modelling, and execution of debt and equity investments. She also managed a portfolio of investments through financial analysis and the preparation of quarterly and annual reports. After completing her MBA at INSEAD, she joined Standard Chartered Bank as a Management Associate before starting her own company in Real Estate valuation and forecasting using Machine Learning. Catherine then joined Colliers from CBRE Research. 

Catherine brings to Colliers more than 15 years of experience, primarily in real estate and investments. She has worked with market data and brokers to develop consolidated views of the real estate markets in Asia Pacific, with a focus on Singapore. She was responsible for producing key market and economic updates, forecasts, and thought-leadership papers,  contributing to business development initiatives, investment advisory proposals and client presentations.

In addition, she has drafted feasibility studies and investment recommendations for top clients which include major developers, REITs, financial institutions, family offices, and funds, as well as presented research findings in client meetings and events. As a real estate research specialist with extensive experience, she looks forward to maximising the potential of property through data driven insights. 


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