Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley
IOI Central Boulevard Towers, a Grade An office property development on Central Boulevard in the CBD, is close to complete occupancy. Last month, The Edge Singapore disclosed that the freshly finished development with 1.24 million sq ft of workplace is around 75% committed.
Regardless of the resilient take-up, Morgan Stanley assumes workplace market rents to remain secure in 2025. The firm is keeping its Grade An office rental foresight unmodified at $12 psf per month for this year, comparable to the year before.
Amongst the renters at IOI Central Blvd Towers is Morgan Stanley, the mainstay renter of the 48-storey West Tower. Amazon will occupy the whole 16-storey East Tower.
The company cites a couple of reasons for its expectation: industry rents tracked by CBRE remained secure in 2024 even as IOI Central Blvd Towers has been continuously leased up. On top of that, anchor renter rentals, on a psf basis, tend to be lower compared to various other leases in just the same structure. “So the new lease at Keppel South Central is unlikely to place much upward stress on market leas,” the report checks out.
Morgan Stanley adds that significantly of the mainstay occupant take-up at brand-new Grade An office complex appears to be steered by occupiers relocating from older CBD structures. This flight to quality could underpin higher vacancies in the second industry that could result in erosion of rental expansion as property managers reduced rents to fill such areas, the record clarifies.
According to a February research study review by Morgan Stanley, Singapore Grade A workplace rental fees are expected to continue to be stable in 2025, even as the workplace industry sees healthy take-up among brand-new growths.
Regardless, whilst office industry rents are expected to remain secure, Morgan Stanley expects rental fee reversions– describing adjustments in rental fees upon the finalizing of a fresh rent out– to remain in the positive single-digit range this year.
Previously this month, Keppel South Central, a 33-storey commercial tower in Tanjong Pagar, achieved its short occupation license. In a Feb 10 report, Keppel revealed close to 50% of the office and retail spot at the project was committed or being proactively negotiated.
A mainstay renter has actually likewise been guaranteed for the establishment, that is claimed to be Manulife, Morgan Stanley’s report adds.
