Singapore CBD office rents hold steady in 1Q2025: Colliers

Office rents in Singapore remained stable in 1Q2025 despite a rise in vacancies, according to real estate services firm Colliers. In its latest quarterly office market report, the company revealed that rents for core CBD premium and Grade-A offices averaged $11.67 psf per month last quarter, a slight decline of just 0.1% compared to the previous quarter.

1Q2025 office rents and vacancy

Source: Colliers
Note: Average gross effective rents are benchmarked to a full-floor space in mid-zone level; conservative figure towards lower-end of rental range for a property. Effective rent refers to average rate payable over the lease term after accounting for incentives.

Colliers notes that rents saw little movement despite a surge in core CBD premium and Grade-A office vacancy to 7.6% due to the completion of Keppel South Central. 

In addition, the firm believes vacancy rates may ease in the future, as the new CBD office supply will be limited in the next two years. The extension of the CBD Incentive and Strategic Development Incentive schemes for another five years may also contribute to tighter supply as more office stock is withdrawn for redevelopment into mixed-use projects.

The tighter supply, combined with stable office demand, is expected to support rental growth for Core CBD premium and Grade-A offices, says Colliers. The firm projects rental growth for this segment to accelerate towards the latter part of 2025 as space is gradually absorbed.

Non-bank financial firms and technology companies are anticipated to continue driving demand for office space. At the same time, Colliers believes renewals and flight-to-quality moves will predominantly drive leasing activity in the market, as uncertainties in the global economic environment dampen sentiment, leading firms to pause expansion plans.

According to Colliers data, capital values and yield for Core CBD premium and Grade-A offices remained at $3,050 psf and 3.6% in 1Q2025, unchanged from the previous quarter. This comes amid muted capital transactions in the office market last quarter, with only strata floors transacted at Tokio Marine Centre and 20 Collyer Quay. 

Catherine He, Colliers Singapore’s head of research, predicts capital values will remain stable. “The office sector holds significant potential for investors to value-add due to the widening gap between older buildings and modern spaces,” she adds.