Healthy take-up in new Grade A office space, but rents to stay stable: Morgan Stanley

The company cites a few factors for its overview: industry rents tracked by CBRE stayed secure last year even as IOI Central Boulevard Towers has been steadily contracted up. Furthermore, anchor lessee hires, on a psf basis, often tend to be lower compared to other leases in just the exact same structure. “So the brand-new lease at Keppel South Central is unlikely to place much higher pressure on market rents,” the record reads.

Tembusu Grand City Developments Ltd & MCL Land

Previously this month, Keppel South Central, a 33-storey business tower in Tanjong Pagar, achieved its temporary occupation permit. In a Feb 10 report, Keppel revealed nearly 50% of the workplace and retail space at the development was dedicated or being proactively discussed.

IOI Central Blvd Towers, a Grade A business office development on Central Boulevard in the CBD, is nearing complete tenancy. Last month, The Edge Singapore reported that the recently completed project with 1.24 million sq ft of office space is approximately 75% committed.

Despite the resilient take-up, Morgan Stanley expects office market rents to stay steady in 2025. The company is trying to keep its Grade A workplace rental projection the same at $12 psf each month for this year, similar to the year just before.

According to a February research study review by Morgan Stanley, Singapore Grade An office rental fees are expected to continue to be steady in 2025, even as the office industry sees healthy take-up among new growths.

Among the renters at IOI Central Boulevard Towers is Morgan Stanley, the mainstay renter of the 48-storey West Tower. Amazon will most likely occupy the entire 16-storey East Tower.

Regardless, while office market rents are foreseed to remain steady, Morgan Stanley anticipates rent reversions– referring to changes in rents upon the signing of a new rent out– to remain in the favorable single-digit range this year.

An anchor renter has additionally been acquired for the building, which is claimed to be Manulife, Morgan Stanley’s statement adds.

Morgan Stanley includes that much of the mainstay occupant take-up at brand-new Grade An office buildings appears to be driven by occupiers moving from older CBD buildings. This flight to quality might underpin greater openings in the alternate market that can cause disintegration of rental expansion as landlords reduced leas to fill up such rooms, the report clarifies.