Real Estate

Lisbon and Singapore Register Highest Increase in Prime Rents

In the first half of 2023, prime rents reached new records in leading locations around the world. Lisbon saw the most significant increase in prime rents (13.9%), trailed closely by Singapore (13.6%).

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Demand from discerning tenants looking for prime properties in leading locations has never been higher. And cities are leading the way. The first half of 2023 has witnessed the highest surge in rents in premier residential locations such as Lisbon, Singapore and Berlin, according to a fresh study by Savills.

Savills’ data shows that, from December 2022 to June 2023, Lisbon saw the most significant increase in prime rents by 13.9%, trailed closely by Singapore with a 13.6% spike, and Berlin recording a 9.2% growth within the same duration.

Over the previous year and a half, the rental markets in Lisbon and Singapore have demonstrated robust growth, with rents skyrocketing by more than 40%, according to Savills. This surge is credited to heightened demand for luxury residences from global tenants.

Lisbon’s Soaring Rental Market

In the popular Portuguese city, luxury rents escalated by 13.9% from December to June, outpacing all other cities in the ranking. This growth rate even surpassed well-established and traditional luxury centres like New York, Hong Kong, and London.

While the cost of prime rental property is rising, the fact is that living in Lisbon is still incredibly affordable in relation to other European cities.

The digital nomad visa has attracted not just low-level freelancers, but also a swathe of skilled workers with money to spend on living in some of the city’s best residences. As of December 2022, Lisbon was home to around 15,800 digital nomads. And with tech companies making the city their home, there is no shortage of young professionals looking for prime city living.

Slowing Down Construction in Singapore

The hike in prime rents in Singapore has been widely attributed to construction delays during the Covid-19 pandemic, which slowed the supply of prime property for awaiting tenants.

In 2023, around 18,000 private residential units for rent are expected to be completed, which will no doubt lead to somewhat of a slowing of what has been exceptional rental price growth.

That said, the report still predicts that prime luxury rental prices could still rise around 15% year on year.

A Spotlight on Asia

Savills’ research reveals that of the 30 cities experiencing the highest escalation in prime rents, 11 are located in the Asia-Pacific region.

Singapore is followed by Kuala Lumpur, which secured the fifth position with a 4.3% boost in prime rents from December 2022 to June 2023, while Bangkok is just a step behind with a 4.2% rise.

Hong Kong holds the twelfth position with a modest 2.7% increase, and Tokyo, five ranks lower, saw a 1.7% ascent in prices.

There’s been a revival of vigour in the rental markets of Kuala Lumpur and Bangkok, a momentum that hadn’t been observed since the pre-pandemic era, the report highlighted. Hong Kong’s leap in prime rents is attributed to a surge in leasing demand following the lift of Covid-19 restrictions at the end of 2022. Meanwhile, Tokyo is benefiting from the trend of individuals relocating back to the city.

As demand for city living continues to rise, there is no doubt that we will continue to see rental prices in prime city centres stay in the spotlight for some time to come.

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