Singapore Grade A Office Market Posts Strongest Quarterly Rental Growth Since 2022 as Supply Constraints Intensify

Singapore – 30 September 2026 – Singapore's office market gained further momentum in Q3 2026 as occupier demand remained resilient across sectors, while the limited availability of quality space continued to tighten market conditions, according to CBRE Research.
 
Core CBD (Grade A) rents rose 2.0% quarter-on-quarter to S$12.75 per square foot per month in Q3 2026, marking the strongest quarterly increase since Q3 2022 which grew 2.7% q-o-q on a post-pandemic cyclical recovery. With this, rental growth for the first three quarters of 2026 comes to 3.7%.
 
At the same time, Core CBD (Grade A) vacancy went down from 3.3% in Q2 2026 to 2.6% in Q3 2026, supported by healthy net absorption and continued occupier expansion activity.
 
Tricia Song, CBRE Head of Research, Singapore and Southeast Asia, said, “In less than two years, Core CBD Grade A vacancy has compressed from 7.8% following the completion of IOI Central Boulevard Towers to just 2.6%, underscoring how quickly the market has absorbed new supply.”
 
She added, “With several prime buildings either fully occupied or approaching full occupancy, occupiers are facing a rapidly diminishing pool of options. Landlords are increasingly exercising pricing power, not only holding firm during renewal discussions but also seeking higher rental levels for new commitments. With year-to-date rental growth already at 3.7%, the market is on track to record its strongest annual performance since 2022.”

AI firms add new dimension to office leasing demand

Leasing demand remained broad-based in Q3, led by financial services occupiers spanning banking, wealth management, insurance, asset management and hedge funds.
 
At the same time, technology and artificial intelligence (AI) firms emerged as an increasingly significant source of demand. CBRE observed activity from AI occupiers across different stages of growth, ranging from firms taking flexible coworking seats to larger businesses seeking dedicated premises in prime office buildings.
 
Notable examples include OpenAI's reported negotiations for approximately 120,000 sq. ft. at Shaw Tower, Anthropic's establishment of operations in Singapore through The Executive Centre at Ocean Financial Centre, and Manus AI's reported commitment to space within Industrious' premises at Keppel South Central.
 
David McKellar, CBRE Head of Leasing, Singapore, observed, “What stands out this quarter is that the market has outperformed expectations despite a challenging global backdrop. Demand remains both deep and diverse. Financial services occupiers continue to be active, while AI companies are rapidly emerging as another important driver of leasing activity across both flexible workspace and traditional office formats.”
 
He added, “The AI ecosystem in Singapore continues to deepen, with leasing activity emerging from companies across the growth spectrum. We are seeing demand ranging from start-ups taking flexible workspace to more established firms evaluating significant commitments in Grade A buildings. This diversity of demand suggests the sector is evolving into a durable source of occupier activity rather than a short-term trend.”

Attention Turns to Future Supply

No major office completions were delivered in Q3 2026, and no new supply is expected for the remainder of the year. Newport Tower in Tanjong Pagar stands as the only notable addition to the CBD pipeline in 2027. Against this backdrop, occupier focus has increasingly shifted towards developments scheduled for completion from 2028 onwards.
 
Projects attracting heightened interest include One Comcentre, The Clifford and The Skywaters, with pre-commitment discussions for future space continuing to build.
 
Mr McKellar noted, “Occupiers seeking large floorplates have far fewer options than they did 12 months ago, and many are no longer waiting until lease expiry to evaluate their requirements. We are seeing greater willingness among occupiers to explore future developments well ahead of completion in order to secure quality space and business continuity.”

CBRE Outlook

With secondary space continuing to shrink, no meaningful supply relief expected before 2028, and occupier demand remaining resilient across multiple sectors, the conditions supporting rental growth remain intact.
 
With year-to-date rental growth already at 3.7% and the pace of gains accelerating in the second half, CBRE expects full-year Core CBD Grade A rental growth to exceed 5% in 2026 — the strongest annual performance since 2022’s 8.3%.
 
The tightening leasing environment is also supportive of office investment sentiment, as investors increasingly focus on prospects for rental growth, improving occupancy and income resilience. Prime office assets remain among the most sought-after sectors in Singapore's commercial real estate market.
 Ms Song concluded, “This has evolved beyond a recovery story. Singapore's office market is increasingly defined by scarcity. With very limited new supply before 2028 and vacancy already near frictional levels, occupiers are competing for a shrinking pool of quality space. Unless economic conditions deteriorate materially, the balance of power is likely to remain with landlords.”