Singapore office rents resume growth: CBRE

Singapore office rents have seen a revival after four consecutive quarters of flat growth, according to research by CBRE. Gross effective rents for core CBD Grade A offices tracked by the firm recorded a 0.8% increase in 1Q2025 to reach $12.05 psf per month. 

Vacancies rose marginally from 4.9% to 5.3%, as a few large occupiers opted not to renew selected spaces or leases, says CBRE. This includes Meta, which opted not to renew its lease of seven floors at South Beach Tower, and Morgan Stanley, which relocated its Southeast Asia headquarters from Capital Square to IOI Central Boulevard Towers. Consequently, core CBD Grade offices registered negative net absorption of 0.15 million sq ft in 1Q2025.

Still, office spaces in prime locations with premium specifications remain in demand, says Tricia Song, head of research for Singapore and Southeast Asia at CBRE. “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’s head of office services for Singapore, believes supply and availability of prime offices in the core CBD will tighten in the coming quarters, noting that IOI Central Boulevard has already achieved occupancy of over 80%.

With the next completion (Clifford Centre) only expected in 2028, he views that landlords stand to benefit. “They are likely feeling emboldened, and more confidently standing firm on asking rents,” he says.

CBRE is forecasting core CBD Grade A rental growth to come in between 2% and 3% this year, outperforming the 0.4% growth logged last year. However, the firm “remains cautious” amid escalating global trade conflicts that could dampen overall business sentiment and trade.

“At this current juncture, global economic uncertainties may delay occupiers’ decisions regarding market expansions, while encouraging renewals,” says Song. Even so, she believes demand should remain resilient in Singapore, given its political neutrality and stable government policies.

In the investment market, office transactions totalled $159.33 million in 1Q2025, plunging 80.8% q-o-q. Nevertheless, office investment volumes continue to recover from the 15-year quarterly low of $69.72 million recorded in 1Q2024, according to CBRE. The largest office transaction last quarter was the sale of the top three floors at 20 Collyer Quay for $91.8 million. 

Michael Tay, CBRE Singapore advisory deputy managing director and head of capital markets, Singapore, believes the market uncertainties caused by the trade war and potential recession in the US may quicken the pace and magnitude of Federal Reserve rate cuts, leading to a resurgence in office sector interest.

He adds: “Singapore is likely to stand out as a stable and attractive real estate investment market amid the increased uncertainty in other global markets. The latest Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) extension should also attract investors and developers to development projects.”