Decentralised office rents fall as firms relocate to CBD: JLL
One instance is Audi Singapore, which most recently relocated 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 short stroll from Capital Square, says Tangye.
On the other hand, office rental fees in the decentralised sub-market reported a downtrend in 2Q2025, its first fall in four years. Rents in the market slipped 0.8% q-o-q to $7.61 psf each month last quarter. “This decrease is attributed to recurring rightsizing efforts and tenants moving to, or closer to, the CBD, driven by the boosted opportunity of space,” JLL includes.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says an expanding pattern of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many establishments in Singapore are developing toward higher-value offerings and enhanced service models, causing a migration of some workplace demand from decentralised places to CBD facilities that better accommodate their progressively sophisticated and client-oriented operations,” he adds.
The redevelopment of 79 Anson Road, which could begin following year, is anticipated to intensify supply restrictions further, he includes.
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As relocations proceed to support demand, office rents in the CBD are anticipated to continue to be small, with JLL forecasting full-year development of 2% this year. Nevertheless, rents may pick up in 2025, amid minimal supply. “No huge office completions are anticipated for the next 12 months, with the new Shaw Tower only happening onstream in 2H2026,” notes Chua.
On the other hand, Tangye thinks proprietors with vacant room are focusing on enhancing occupancy and stabilising profiles ahead of 2026, when leas might begin increasing again before brand-new supply gets in the marketplace in 2028. He includes: “By executing targeted property improvements, consisting of modernised entrance halls and washrooms, along with the remediation and improvement of out-of-date office areas, property owners are placing themselves to attract premium lessees and capitalise on the awaited rental development chances.”
A lot more firms might be compelled to move to the CBD because of “the present absence of a considerable rent gap between CBD and decentralised workplaces”, states Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rent void between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is lower the historical 50% to 60% tier.
Regardless of continuous financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective leas rose 0.7% q-o-q to $11.69 psf monthly, noting a fifth straight quarter of sub-1% growth, according to JLL.
