Growth Resumes in Singapore's Office Rents

Singapore, 8 April 2025 – Following four consecutive quarters of flat rental growth, Core CBD (Grade A) office rents in Singapore saw a revival of growth in Q1 2025. CBRE recorded a 0.8% increase in gross effective rents in this most-coveted subsector, reaching an average of S$12.05 psf/month.

Tricia Song, CBRE Head of Research for Singapore and Southeast Asia, observed, “Even as increasing numbers of firms are warming up to decentralisation, top corporations and also companies in sectors like private wealth asset management still show a strong preference for office spaces in prime locations with premium specifications. We can see this in the low vacancies in buildings that meet both criteria, and also the fact that spaces within such buildings offering unblocked views persistently establish new record rents.”

David McKellar, CBRE Head of Office Services, Singapore, added, “From the supply-side perspective, landlords have observed the rapid absorption of the overhang in the IOI Central Boulevard Towers where occupancy has already exceeded 80%. This is the most recent completion in the prime CBD area, with the next expected completion coming only in 2028 – when Clifford Centre is to be introduced. They are likely feeling emboldened, and more confidently standing firm on asking rents.”

Vacancies inched up slightly q-o-q from 4.9% to 5.9%, with a negative net absorption of 0.15 million square feet, primarily due to a few large occupiers opting not to renew selected spaces or leases. For example, Meta in Marina One and Morgan Stanley in Capital Square collectively contributed to about 0.17 million square feet of vacancies in Q1 2025.

“Nevertheless, vacancies for prime buildings in the Core CBD remain low. This temporary slight bump in availability might represent a great opportunity for tenants to jump on compelling options that represent good value, before supply and availability tightens further over the coming quarters, and likely years”, Mr McKellar commented. 

In the wider Singapore landscape, two projects were completed in this quarter – namely Keppel South Central (0.5 million square feet) in the fringe CBD and Paya Lebar Green (0.32 million square feet) in the decentralised area. These assets have seen interest from sectors like insurance, for instance, Keppel South Central has secured Manulife as its anchor tenant. The co-working sector also observed expansion activity from operators such as Smartworks, as well as The Great Room which is projected to open a 36,000 square feet workspace in Shaw Towers in 2026.

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