Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley
IOI Central Blvd Towers, a Grade A business office development on Central Boulevard in the CBD, is close to full tenancy. Last month, The Edge Singapore disclosed that the recently finished development with 1.24 million sq ft of office space is approximately 75% committed.
In any case, while workplace industry leas are expected to continue to be stable, Morgan Stanley anticipates rent reversions– referring to changes in leas upon the finalizing of a fresh lease– to stay in the favorable single-digit range this year.
Morgan Stanley adds that much of the mainstay lessee take-up at new Grade An office buildings appears to be generated by occupiers transferring from older CBD structures. This flight to quality might underpin higher openings in the alternate industry that could cause disintegration of rental expansion as proprietors reduced rents to load such areas, the record elaborates.
An anchor renter has also been guaranteed for the establishment, which is stated to be Manulife, Morgan Stanley’s report includes.
Regardless of the resilient take-up, Morgan Stanley assumes office market rents to continue to be steady in 2025. The company is keeping its Grade An office rental forecast unchanged at $12 psf each month for this year, comparable to the year before.
Previously this month, Keppel South Central, a 33-storey commercial tower in Tanjong Pagar, acquired its short occupation authorization. In a Feb 10 report, Keppel declared close to 50% of the office and retail space at the development was dedicated or being proactively discussed.
The firm points out a few reasons for its outlook: industry leas tracked by CBRE stayed stable in 2024 maybe even as IOI Central Blvd Towers has been steadily contracted up. In addition, anchor occupant hires, on a psf basis, tend to be cheaper compared to other leases in just the very same building. “So the brand-new lease at Keppel South Central is not likely to put much upward stress on market rents,” the record reads.
According to a February study report by Morgan Stanley, Singapore Grade An office rents are expected to continue to be secure in 2025, even as the workplace market sees healthy take-up among new developments.
Among the lessees at IOI Central Blvd Towers is Morgan Stanley, the mainstay renter of the 48-storey West Tower. Amazon will occupy the entire 16-storey East Tower.
