Premium office space pushes Singapore’s CBD rents to new heights – CBRE

SINGAPORE: The need for premium office space in Singapore is driving up rents in the city-state’s Core Central Business District (CBD). According to real estate consultancy firm CBRE, in a recent report from Singapore Business Review, Grade A office rents rose by 0.8% in Q1 2025 after a year of inertia, reaching $12.05 per square foot per month. However, despite escalating rents, vacancy rates increased to 5.3% from 4.9% in the previous quarter. This was primarily because of large tenants like Meta at Marina One and Morgan Stanley at Capital Square opting not to restart certain agreements, jointly producing roughly 170,000 square feet of recently available space.

On the supply side, property owners have been sustained by the robust leasing performance at IOI Central Boulevard Towers, which reached more than 80% tenancy.

With no major CBD completions expected until Clifford Centre’s renovation in 2028, the skintight supply may persist to support rental growth. In the wider market, two prominent completions were delivered in Q1 – Keppel South Central in the far-flung CBD and Paya Lebar Green in a dispersed location. Keppel got Manulife as its anchor tenant, while flexible office providers like Smartworks and The Great Room are also developing their trail—The Great Room is scheduled to open a 36,000-square-foot space in Shaw Towers in 2026.

According to Corporate Location’s ‘Office Market Review Q1 2025,’ current structures with the most substantial office space existing include Marina One East & West, Capital Square, and Asia Square. The completion of Keppel South Central will add a further 435,000 sq ft to supply.

Tricia Song, CBRE head of research for Singapore and Southeast Asia, observed, “Even as increasing numbers of firms are warming up to decentralisation, top corporations and also companies in sectors like private wealth asset management still show a strong preference for office spaces in prime locations with premium specifications. We can see this in the low vacancies in buildings that meet both criteria, and also the fact that spaces within such buildings offering unblocked views persistently establish new record rents.”

David McKellar, CBRE head of office services, Singapore, added, “From the supply-side perspective, landlords have observed the rapid absorption of the overhang in the IOI Central Boulevard Towers where occupancy has already exceeded 80%. This is the most recent completion in the prime CBD area, with the next expected completion coming only in 2028 – when Clifford Centre is to be introduced. They are likely feeling emboldened, and more confidently standing firm on asking rents.”

CBRE estimates a 2–3% increase in Core CBD (Grade A) rents for 2025 in comparison to just 0.4% in 2024. However, global fears such as trade conflicts and tariffs remain latent challenges.