Higher rental costs driving smaller firms away from city centre into industrial estates

Mr Loo, who is also a real estate agent, said he believes office rents will continue to rise in the coming months.

Prices in industrial estates, however, are still expected to remain more affordable compared to renting a workspace in more central locations

Typically, only businesses in sectors like manufacturing, warehousing, IT and research can rent spaces in such industrial spaces, analysts told CNA.

Mr Lee Sze Teck, senior director and head of research at Huttons Singapore, said that only bigger production companies, such as news companies, have offices in the central business district (CBD).

“For smaller businesses, the rental cost will not make sense for them. They would rather be in a place that’s more economical for them,” he said.

“Those who are actually priced out of the CBD, naturally, they will have to look for an alternative space. Industrial (areas) is one of it, or even business parks. But they do have to qualify to be able to go to this space to operate their business.”