%20(1).jpg?6gpaSSHP6UZL1Q75Xrf_bleRwZBNc6W8&itok=mtfbovbi "A Knight Frank research report shows that prime grade office rents in the Raffles Place-Marina Bay precinct inched up 0.2% q-o-q to an average of $11.38 psf per month in 2Q2025 (Picture: Samuel Isaac Chua/The Edge Singapore)")
CBD office rents continued to edge upwards in 2Q2025, as renewals and flight-to-quality drove leasing activity. A Knight Frank research report shows that prime grade office rents in the Raffles Place-Marina Bay precinct inched up 0.2% q-o-q to an average of $11.38 psf per month (pm) in 2Q2025.
This brings office rental growth in the precinct to 0.2% for the first half of the year, slowing from the 1.3% increase recorded between the same period last year, the firm says. The slower growth comes as most occupiers continued to renew at their current location to avoid relocation capital expenditure, it adds.
However, some corporate relocations still occurred last quarter, driven by flight-to-quality moves. For example, Prudential Singapore recently completed its shift to Labrador Tower, a newly completed office tower on Pasir Panjang Road. The move freed up about 73,300 sq ft of office space at Marina One, which was subsequently taken up by Singlife. Another 40,000 sq ft of space at Marina One, previously held for Meta, was taken up by Bank of New York Mellon, together with 10,000 sq ft that was previously occupied by BP.
In a separate release, CBRE notes that relocations have resulted in the Core CBD Grade A office vacancy rate declining from 5.9% in 1Q2025 to 5.3% last quarter. “Notably, the IOI Central Boulevard Towers continued to absorb the market overhang from last year, reaching an occupancy rate of approximately 85% by 2Q2025,” adds Tricia Song, CBRE’s head of research for Southeast Asia.
David McKellar, CBRE head of office services for Singapore, says that large contiguous spaces exceeding 30,000 sq ft remain scarce in the CBD, while centrally located prime office spaces in the secondary market have also been taken up.
Supply is expected to tighten further in the near term, with no major completions in the Core CBD expected until 2028. As a result, some occupiers are opting to accelerate decision-making in order to secure desirable units while they are still available, says McKellar.
Knight Frank anticipates flight-to-quality moves, particularly among small and mid-sized occupiers, to sustain momentum in the coming months. Nonetheless, the firm notes that business and consumer sentiments are expected to be more cautious amid tariff uncertainties and other headwinds. The firm is projecting prime rental growth in 2H2025 to remain flat, with a forecast range of -1% to 2% for the entire year.
