CBD office rents continue subdued growth trajectory in 1Q2025
A separate report by Knight Frank spotted that prime grade office rents in the Raffles Place and Marina Bay district stayed unchanged from the last quarter, at $11.36 psf each month in 1Q2025. At the same time, the CBD occupancy degree declined partially from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank connects to the recently completed Keppel South Central.
Workplaces in other locations islandwide presented q-o-q changes varying from -0.3% to 3.4%.
“Although this transfer fad is not yet prevalent, tenants are progressively considering cost-neutral options that include right-sizing and transferring to even more modern workplace centers in order to reduce expense,” notes Yeo. On top of that, occupiers may be incentivised to relocate as property managers offer subsidised fit-out costs or other benefits in a quote to maintain tenancy degrees.
Situated in Tanjong Pagar, Keppel South Central was finished in early February. During the time, Keppel introduced that almost 50% of the space had actually been devoted or was under arrangement. The structure has actually also protected its very first support occupant, reportedly insurance company Manulife.
The predicted growth in need are going to accompany a drop in brand-new workplace supply following the finalization of IOI Central Boulevard Towers and Keppel South Central. “Supply of brand-new office space is readied to be constricted between 2Q25 and 2027,” states Chua Yang Liang, head of research and consultancy for JLL Southeast Asia. This would “support modest but sustained growth in office leas during this period”, he includes.
On The Other Hand, Knight Frank’s Yeo notes that aside from Shaw Tower, no contributions to the marketplace are expected in the nearby term. This could present an obstacle for large-footprint inhabitants, making movings among such renters unlikely in the brief to medium term.
The marginal development continues the subdued trajectory in workplace rents over the last four quarters. CBD rents expanded 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the longest duration of modest variant in rents since we began tracking this information series,” states JLL in a March 26 news release.
The flight to quality is set to drive need for new office. Andrew Tangye, head of office leasing and advisory at JLL Singapore, notes that IOI Central Blvd Towers, finished in 2024, is nearing 80% dedication. As a result, he foresees demand will certainly spill over to Keppel South Central and the upcoming growth of Shaw Tower.
Calvin Yeo, head of occupier strategy and options at Knight Frank, says that amid global uncertainty, many occupiers are choosing to restore leases at existing premises. At the same time, others are starting to search for quality workplace as part of possible flight-to-quality actions.
He anticipates that most significant global firms with workplaces in Singapore will continue to be in a holding pattern up until greater clarity surfaces on the international landscape. Nevertheless, flight-to-quality actions might occur amongst some companies upon lease expiration as they look for to right-size or lower prices. Knight Frank also anticipates prime workplace rental growth to range between -1% to 2% for the whole of 2025.
Local office space rents presented little change in Q1 2025, based upon information compiled by JLL. The research discloses that CBD Grade An offices traced by the consultancy reported a gross efficient lease of $11.60 psf monthly for the very first quarter, edging up just 0.5% q-o-q.
Due for finish in 2026, the development recently protected its first tenant, co-working company The Great Room. The business revealed earlier this month that it will certainly open a 36,000 sq ft work space in the building next year.
Tangye is positive about workplace demand, keeping in mind that MNCs in Singapore are progressively adopting a complete return-to-office model while the financial solutions industry is recoiling. Last November, Barclays showed strategies to set up Singapore as its 2nd booking centre for Asia Pacific private banking operations, while Standard Chartered announced a development of its wealth management programs in the city-state.
