Singapore Office Rents Resume Growth Cbre
Singapore office market showing strong resilience amidst global uncertaintiesSingapore office market remains tight amidst slowing economy
CBRE research shows that office rents in Singapore have experienced a revival after four consecutive quarters of stagnant growth. According to the firm, gross effective rents for core Grade A offices in the CBD increased by 0.8% in the first quarter of 2025, reaching a record high of $12.05 psf per month.
Although there was a slight increase in vacancies from 4.9% to 5.3%, this was attributed to a few large occupiers choosing not to renew their leases or selected spaces. Some examples include Meta, which did not 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. As a result, the core CBD Grade A offices experienced a negative net absorption of 0.15 million sq ft in the first quarter of 2025.
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However, Tricia Song, head of research for Singapore and Southeast Asia at CBRE, points out that there is still a high demand for office spaces in prime locations with premium specifications. She attributes this to the low vacancy rates in buildings that meet both criteria and the record-breaking rents for spaces with unblocked views.
CBRE’s head of office services for Singapore, David McKellar, predicts that the supply and availability of prime offices in the core CBD will tighten in the coming quarters. He highlights that IOI Central Boulevard has already achieved an occupancy rate of over 80%. With the next major completion (Clifford Centre) not expected until 2028, landlords are feeling more confident and are standing firm on their asking rents.
CBRE forecasts that core CBD Grade A rents will continue to grow between 2% and 3% this year, outperforming the 0.4% growth observed last year. However, the firm remains cautious due to the ongoing global trade conflicts that could affect business sentiment and trade. Song believes that demand for office spaces in Singapore will remain resilient due to its political neutrality and stable government policies.
In terms of office investments, CBRE reports a total transaction volume of $159.33 million in the first quarter of 2025, representing an 80.8% decrease from the previous quarter. Despite this, the investment volume continues to recover from the 15-year low recorded in the first quarter of 2024. The largest office transaction in the first quarter of 2025 was the sale of the top three floors at 20 Collyer Quay for $91.8 million.
Michael Tay, CBRE’s Singapore advisory deputy managing director and head of capital markets, believes that the uncertainties caused by the trade war and potential recession in the US may lead to a resurgence in interest in the office sector. He predicts that Singapore will stand out as a stable and attractive real estate investment market compared to other global markets facing increased uncertainty. The recent extension of the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) is also expected to attract investors and developers to development projects.