CBD office rents continue subdued growth trajectory in 1Q2025
The trip to quality is set to drive demand for brand-new office. Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, notes that IOI Central Blvd Towers, completed in 2024, is nearing 80% commitment. As a result, he foresees need will spill over to Keppel South Central and the anticipated advancement of Shaw Tower.
Meanwhile, Knight Frank’s Yeo notes that other than Shaw Tower, no contributions to the market are anticipated in the nearby term. This can position an obstacle for large-footprint inhabitants, making movings amongst such tenants unlikely in the brief to medium term.
“Although this moving trend is not yet extensive, occupiers are significantly taking into consideration cost-neutral options that include right-sizing and relocating to more modern office facilities in order to reduce expense,” notes Yeo. Furthermore, occupiers might be incentivised to relocate as property managers supply subsidised fit-out costs or other advantages in a bid to preserve occupancy levels.
He predicts that most major global firms with offices in Singapore are going to stay in a holding pattern until higher clarity surfaces on the global landscape. Nonetheless, flight-to-quality moves may occur among some companies upon lease expiration as they seek to right-size or minimize expenses. Knight Frank also expects prime office rental growth to range in between -1% to 2% for the whole of 2025.
The forecasted development in demand will accompany a drop in new workplace supply following the finalization of IOI Central Blvd Towers and Keppel South Central. “Supply of new office space is set to be constrained between 2Q25 and 2027,” says Chua Yang Liang, head of research study and consultancy for JLL Southeast Asia. This would “uphold modest but sustained development in office rents throughout this period”, he includes.
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Offices in other locations islandwide presented q-o-q modifications varying from -0.3% to 3.4%.
Tangye is hopeful about workplace demand, noting that MNCs in Singapore are gradually taking on a full return-to-office model while the financial solutions industry is rebounding. Last November, Barclays showed plans to develop Singapore as its second booking centre for Asia Pacific exclusive banking affairs, while Standard Chartered declared an expansion of its wealth management services in the city-state.
The marginal growth continues the controlled movement in workplace rents over the last four quarters. CBD leas grew 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the lengthiest period of modest variation in rents since we started tracking this information collection,” claims JLL in a March 26 press release.
Calvin Yeo, head of occupier strategy and solutions at Knight Frank, says that amid international unpredictability, several occupiers are opting to renew rent at existing premises. At the same time, others are beginning to search for high quality workplace as part of possible flight-to-quality moves.
Found in Tanjong Pagar, Keppel South Central was finished in early February. During the time, Keppel announced that close to 50% of the space had been dedicated or was under negotiation. The structure has also protected its very first support occupant, reportedly insurance firm Manulife.
A separate report by Knight Frank spotted that prime quality workplace rents in the Raffles Place and Marina Bay precinct remained the same from the previous quarter, at $11.36 psf per month in 1Q2025. At the same time, the CBD occupancy level decreased marginally from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank connects to the recently finished Keppel South Central.
Due for finish in 2026, the property development lately protected its very first tenant, co-working company The Great Room. The business announced earlier this month that it will open up a 36,000 sq ft workspace in the establishment next year.
Local workplace rents showed little change in Q1 2025, based on data collected by JLL. The research discloses that CBD Quality An office spaces traced by the consultancy documented a gross effective lease of $11.60 psf per month for the very first quarter, edging up just 0.5% q-o-q.
