Singapore CBD office rents mostly stable in Q1 despite uptick in vacancy

SINGAPORE: Office rents in the city-state’s Core Central Business District (CBD) stayed mostly stable in the first quarter of 2025, despite an uptick in vacancy rates and limited new office supply, according to Colliers’ latest market report.

Singapore Business Review reported that Core CBD Premium and Grade A office rents dropped slightly by 0.1% quarter-on-quarter (QoQ) to S$11.67 per square foot (sq ft). However, capital values remained steady at S$3,050 per sq ft.

While there was a slight drop, rents in some premium buildings saw slight increases, indicating continued demand for high-quality office spaces in the area.

Colliers Singapore’s executive director and head of tenant representation, Tridiana Ong, said, “The core CBD Premium and Grade A segment is expected to outperform due to limited supply and resilient demand for quality spaces in the CBD.”

She also noted that office buildings outside the CBD might face some pressure but could attract tenants looking for lower rents and different value propositions.

The vacancy rate in the premium segment increased to 7.6%, largely due to the new addition of Keppel South Central. However, Colliers pointed out that the building is already close to 50% occupied, suggesting that overall vacancies could drop as available space gets filled.

With limited new office supply expected in the next two years, the report urges tenants to act quickly to secure office space at their preferred locations and favourable lease terms.

It stated, “Tenants should act decisively to secure space as supply tightens and the pool of options shrinks.”

Colliers also observed steady interest from tenants in sectors like asset management, family offices, non-bank financials, professional services, and technology. Lease renewals and businesses seeking to upgrade to modern office spaces are expected to account for much of this activity.

Meanwhile, for investors, Colliers noted that the growing gap between older and newer office buildings could present opportunities for repositioning older properties to meet current demand.

Colliers anticipates that the CBD’s premium office segment will remain a main focus for both tenants and investors as office trends evolve, driven by limited supply and steady demand for quality real estate. /TISG 

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