New: You can now listen to articles.SINGAPORE: Businesses are remaining cautious about spending and investment plans and that, alongside the new normal of hybrid work, will continue to weigh on Singapore’s prime office market, according to industry experts at real estate consultancies.
Apart from international banks which have long been reducing their office footprints, technology firms that aggressively took up space in the CBD during the COVID-19 pandemic have also been following suit, he wrote. Citi meanwhile will be giving up one of six floors it occupies at Asia Square Tower 1. In response to queries, a spokesperson cited the bank’s hybrid work model as the reason.
"This is still being figured out, so many businesses are still waiting for a decision from their head offices. In the meantime, they don’t have the budget to move and fit out a new space.” “This is why short-term renewals have been the main activity we saw in 2023 and early 2024, and that is why rents went up marginally, not because of overwhelming new leases,” Mr Cheong said.
These smaller businesses have been among the most active in seeking out new office spaces, with “modest demand” coming from firms such as those from North Asia that are establishing new offices in Singapore, the consultancy added. Then there are companies that have moved back or are planning to move back into the CBD, as the rental gap between CBD and other districts has narrowed slightly.