Singapore’s gleaming office towers are defying a global slowdown in commercial real estate, in a sign of the Asian hub’s continuing appeal.

Prime office rents in the city-state increased 2.5% in the first half of 2023. The overall occupancy level in the central business district in the second quarter reached 94.4%, edging up from the previous quarter, according to a report from Knight Frank Singapore.

As vacant skyscrapers in metropolises from New York to Hong Kong struggle to lure new tenants, Singapore stands out. Despite rising rents and a fragile global economic outlook, demand for Singapore office space is growing as multinational companies continue to relocate functions and set up headquarters in the city-state.

Knight Frank upgraded its 2023 outlook for Singapore’s prime-office rent growth to 3-5%, up from 3%.

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The city-state saw more than 8,000 newly registered entities in the first five months, according to Knight Frank, citing data from the Accounting and Corporate Regulatory Authority. A total of 203 foreign firms have registered in the city since 2021, according to the Straits Times.

Meanwhile, distress is spreading in the US commercial real estate industry. The amount of troubled assets climbed to nearly $64 billion in the first quarter of this year.

New York office vacancies are expected to reach a record 22.7% this year, while 13 million square feet of Hong Kong office space sat empty in April, with 15% of the most valuable space still vacant.

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Major institutional owners including Brookfield Corp. have chosen to stop payments on some buildings. A cocktail of challenges — from higher interest rates to the enduring nature of remote work — may lead to a bigger shakeout that jolts the industry and leaves city centers pockmarked with empty buildings.