Decentralised office rents fall as firms relocate to CBD: JLL
As relocations proceed to support demand, workplace leas in the CBD are anticipated to stay modest, with JLL anticipating full-year growth of 2% this year. Nevertheless, rental fees might pick up in 2025, amidst minimal supply. “No significant workplace conclusions are anticipated for the next 12 months, with the new Shaw Tower only coming onstream in 2H2026,” notes Chua.
One instance is Audi Singapore, that most recently moved its business from Aperia on Kallang Avenue to Capital Square in the CBD. The relocation coincided with the showroom’s change from Alexandra Road to 18 Cross Street, simply a brief walk from Capital Square, states Tangye.
The redevelopment of 79 Anson Road, that might start following year, is anticipated to intensify supply constraints even more, he adds.
Meanwhile, Tangye believes proprietors with vacant space are concentrating on increasing occupancy and stabilising portfolios ahead of 2026, when leas might begin climbing again before new supply gets in the market in 2028. He includes: “By carrying out targeted property enhancements, consisting of modernised lobbies and restrooms, together with the remediation and restoration of out-of-date workplace locations, homeowner are placing themselves to attract costs occupants and capitalise on the expected rental growth chances.”
Regardless of continuous financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective rental fees climbed 0.7% q-o-q to $11.69 psf each month, noting a fifth straight quarter of sub-1% growth, according to JLL.
On the other hand, workplace leas in the decentralised sub-market documented a downturn in 2Q2025, its very first fall in 4 years. Rents in the market slipped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decline is credited to continuous rightsizing efforts and tenants relocating to, or closer to, the CBD, motivated by the enhanced availability of space,” JLL adds.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says an increasing trend of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many businesses in Singapore are evolving towards higher-value offerings and enhanced service models, causing a movement of some workplace need from decentralised areas to CBD facilities that better suit their progressively sophisticated and client-oriented operations,” he includes.
More business may be obliged to transfer to the CBD because of “the existing absence of a considerable lease space in between CBD and decentralised offices”, claims Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rental fee gap in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua says is below the historic 50% to 60% range.
