In a notable shift, office rents in the Central Region experienced a modest increase of 0.3% quarter-on-quarter in the first quarter of 2025, reversing a trend of declining prices over the previous two quarters. This uptick signifies a potential stabilization in the market after a period marked by a decrease in rental rates.
In the last quarter of 2024, office rents dropped by 0.9%, followed by a slight reduction of 0.5% in the third quarter of the same year. The newly reported figures indicate a refreshing change, suggesting that demand for office space may be regaining momentum.
Year-on-year, the growth of office rents in the Central Region stood at 2.0% in the first quarter of 2025. However, this figure reflects a notable decrease from the more robust 5.8% increase observed in the same period the previous year.
The reduction in year-on-year growth highlights a more cautious market environment, even as the current quarter shows signs of recovery. Stakeholders in the real estate sector are likely to monitor these fluctuations closely, as they may indicate broader economic trends.
Core Central Business District (CBD) Grade-A office rents experienced a more pronounced increase than the overall market, rising by 0.8% quarter-on-quarter to reach $12.05 per square foot per month in 1Q2025.
This segment of the market appears to be particularly resilient, showcasing its appeal to businesses seeking high-quality office space in prime locations. The increase in Grade-A office rents could be attributed to various factors, including limited supply in desirable areas and a gradual recovery in business activities post-pandemic.
Conversely, the median rents for Category 1 offices saw a slight decline of 0.1% quarter-on-quarter, settling at $12.07 per square foot per month during the same period.
This minor decrease in median rents for Category 1 offices indicates that while some segments of the office market are experiencing growth, others continue to face challenges. The divergence in performance between different categories of office space highlights the complexity of the current market dynamics.
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News Source: Edgeprop
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