CBD office rents continue subdued growth trajectory in 1Q2025
Local office rental fees showed little change in Q1 2025, based on data compiled by JLL. The research discloses that CBD Quality An office spaces tracked by the consultancy recorded a gross effective lease of $11.60 psf per month for the very first quarter, outlining up just 0.5% q-o-q.
Workplaces in some other areas islandwide presented q-o-q changes ranging from -0.3% to 3.4%.
Tangye is hopeful about workplace need, keeping in mind that MNCs in Singapore are progressively taking on a complete return-to-office model while the financial services field is recoiling. Last November, Barclays showed plans to set up Singapore as its 2nd booking centre for Asia Pacific private financial affairs, while Standard Chartered announced a development of its wealth management services in the city-state.
A different record by Knight Frank spotted that prime quality office rents in the Raffles Place and Marina Bay precinct stayed the same from the last quarter, at $11.36 psf per month in 1Q2025. At the same time, the CBD occupancy level declined partially from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank attributes to the newly completed Keppel South Central.
Found in Tanjong Pagar, Keppel South Central was finished in very early February. At the time, Keppel introduced that close to 50% of the space had been dedicated or was under negotiation. The structure has actually also protected its initial support renter, reportedly insurance company Manulife.
Calvin Yeo, head of occupier strategy and solutions at Knight Frank, claims that amidst global uncertainty, several occupiers are opting to renew leases at existing premises. At the same time, others are starting to search for high quality office spaces as part of potential flight-to-quality moves.
The predicted development in need are going to coincide with a decrease in brand-new workplace source following the completion of IOI Central Boulevard Towers and Keppel South Central. “Supply of new workplace is readied to be constricted in between 2Q25 and 2027,” states Chua Yang Liang, head of study and consultancy for JLL Southeast Asia. This would certainly “support modest but sustained development in office rents throughout this period”, he adds.
He predicts that most significant global firms with workplaces in Singapore are going to remain in a holding pattern until higher clarity emerges on the worldwide landscape. Nevertheless, flight-to-quality moves may occur amongst some services upon lease expiry as they look for to right-size or reduce costs. Knight Frank also anticipates prime office rental development to range between -1% to 2% for the entire of 2025.
The marginal development continues the subdued trajectory in workplace rentals over the last four quarters. CBD rental fees expanded 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the longest period of modest variation in rents since we began tracking this data collection,” states JLL in a March 26 press release.
The flight to quality is set to drive need for new office. Andrew Tangye, head of office leasing and advisory at JLL Singapore, notes that IOI Central Blvd Towers, finished in 2024, is nearing 80% dedication. As a result, he expects need will certainly spill over to Keppel South Central and the forthcoming advancement of Shaw Tower.
On The Other Hand, Knight Frank’s Yeo notes that besides Shaw Tower, no significant additions to the marketplace are anticipated in the nearby term. This might pose an obstacle for large-footprint occupiers, making movings among such renters unlikely in the short to medium term.
“Although this transfer trend is not yet prevalent, occupiers are progressively considering cost-neutral options that consist of right-sizing and transferring to even more modern office centers in order to reduce price,” notes Yeo. In addition, inhabitants might be incentivised to move as proprietors supply subsidised fit-out costs or other advantages in a proposal to preserve tenancy levels.
Due for finalization in 2026, the property development lately secured its very first renter, co-working company The Great Room. The business introduced earlier this month that it will certainly open up a 36,000 sq ft work area in the building following year.
