CBD Grade A offices saw rental growth pick up in 2025 as supply tightened (Picture: Samuel Isaac Chua/EdgeProp Singapore)
The Singapore office market was broadly stable this year, demonstrating resiliency amid ongoing global economic uncertainties. Despite a quiet start to 2025, market players observed a pickup in Grade A CBD office leasing activity, underpinned by a tightening of supply, flight-to-quality moves, and easing of interest rate concerns.
According to CBRE research, rents for Core CBD (Grade A) offices rebounded in 2025, marking consecutive quarters of growth, after a flat performance in 2024 amid a cautious market. In 3Q2025, gross effective rents in this category rose by 0.8% q-o-q to $12.20 psf per month, based on CBRE’s basket of properties. “For 2025, we estimate Core CBD Grade A office rents grew by 2.9% for the full year, a sharp improvement compared to the modest 0.4% growth recorded in 2024,” adds Tricia Song, CBRE’s head of research for Singapore and Southeast Asia.
Cushman & Wakefield is similarly projecting full-year rental growth of 2% to 3% for CBD Grade A offices, rising from the 1.7% growth its rental basket recorded in 2024. In its 2026 Singapore market outlook report, the firm notes that leasing volume for prime offices in the CBD reached roughly 1 million sq ft as of October, already surpassing the 0.8 million sq ft for all of 2024.
Read also: CBD office rents inch upwards as renewals, flight to quality drive leasing activity in 2Q2025
IOI Central Boulevard Towers, the 1.26 million sq ft office development by Malaysia’s IOI Properties Group in Marina Bay, was a key driver of CBD Grade A leasing deals. Comprising two office towers on a seven-storey retail podium, the development was completed last year.
A year on, the remaining space at the development has been steadily absorbed, with IOI Properties reporting a leasing commitment rate of 95% in its quarterly financial report for the period ending Sept 30, published on Nov 25. Notable transactions inked at the development this year include leases by pharmaceutical giant MSD and American quantitative trading firm Jane Street.
According to Cushman & Wakefield, the former leased approximately 67,000 sq ft at the development, while Jane Street leased approximately 45,000 sq ft. Other new occupiers include Zoom Communications, which moved from a co-working space at Asia Square to its new 7,500 sq ft office at IOI Central Boulevard Towers in August.
The strong take-up at the development, along with absorption of residual space at Marina One, has significantly brought down vacancy rates in the Core CBD (Grade A) segment, which peaked at 7.8% in 3Q2024, says CBRE’s Song. “Preliminary figures indicate vacancy could reach 4.7% by the end of November 2025, and potentially even lower by year-end, depending on whether several pending leases are finalised,” she adds.
CBD Grade A net supply, demand and vacancy
Compared with IOI Central Boulevard Towers, new office completions in 2025 were significantly smaller in scale. They comprised Keppel South Central, a 33-storey office tower in Tanjong Pagar with about 550,000 sq ft of space, and Paya Lebar Green, a 335,000 sq ft office development in the Paya Lebar commercial precinct. Both developments received their temporary occupation permits in February.
The projects have also seen healthy commitments. At least 50% of office and retail space at Keppel South Central is committed or under negotiation, with takers including anchor tenant Manulife and the Competition and Consumer Commission of Singapore. Meanwhile, Paya Lebar Green has reportedly been fully taken up, with Visa said to be the development’s anchor tenant, taking some 200,000 sq ft.
Read also: Singapore office rents resume growth: CBRE
Looking ahead, the supply of new prime office space is expected to further tighten in 2026. “The only major completion scheduled for 2026 is Shaw Towers, which is in the Fringe CBD and therefore does not add to the Core CBD Grade A basket,” says CBRE’s Song. Located on Beach Road in the Bugis area, the new Shaw Towers will feature 435,000 sq ft of Grade A office space and a retail podium.
As a result, Song expects the vacancy rate for Core CBD Grade A offices to decline even further. “We anticipate vacancy could fall to near 4% by year-end 2026, marking one of the lowest levels in recent years.” According to Cushman & Wakefield, new office supply islandwide is projected to average 0.5 million sq ft annually from 2026 to 2027, less than half of the decade’s average annual net demand of 1.3 million sq ft. “CBD Grade A vacancy rates could potentially fall to under 4% in 2026, as new supply in 2026 will be the lowest in over a decade, excluding 2023,” the company states in its outlook report.
Overall, office supply is expected to see a rebound only in 2028, with developments scheduled for completion including Singtel’s Comcentre in the Orchard area, Singapore Land’s Clifford Centre at Raffles Place, and the office component at The Skywaters, developed by a Perennial Holdings-led consortium. The projects are expected to add about 2 million sq ft of office space.
Selected upcoming office supply islandwide
At the same time, demand for quality office space in prime locations will likely stay steady in 2026. “Occupier sentiment is expected to remain positive, shaped by Singapore’s economic resilience and safe haven appeal,” says Chua Yang Liang, head of research and consultancy for Southeast Asia at JLL.
Chua anticipates leasing activity will continue to be driven by renewals and the ongoing flight to quality, as organisations move to future-proof their workspaces in efficient, ESG-compliant buildings. “Space optimisation, rather than footprint expansion, remains a priority for most, especially where hybrid work persists,” he adds.
David McKellar, head of office services for Singapore at CBRE, expects leasing activity in the next year to be supported by a combination of renewals, relocations and selective expansionary moves, with demand led by banking and financial services, tech firms and professional services. “We also envisage AI companies needing office space, driven by heavy venture capital investment and corporate adoption,” he continues.
Read also: Singapore CBD office rents hold steady in 1Q2025: Colliers
However, occupiers will face increasingly limited options for prime office space as supply dwindles. McKellar notes that large contiguous spaces exceeding 30,000 sq ft remain scarce, while prime office space in the secondary market has also been swiftly absorbed.
Tridiana Ong, head of occupier strategy and solutions at Knight Frank Singapore, has a “cautiously positive” outlook on the office market, noting that leasing interest from regional corporate and financial firms remains strong, despite global economic uncertainty. However, the ongoing flight to quality points to an uneven distribution of demand. “The office scene will increasingly be characterised by a two-tier market where newer buildings continue to be in high demand, against older buildings that will feel the pressure of slowly being phased out and will need to be redeveloped or modernised,” she predicts.
Given this landscape, the balance of power within the office market is expected to shift towards landlords. “The supply-demand imbalance will allow property owners to pursue more aggressive rental strategies, particularly across premium office assets,” says JLL’s Chua. To that end, JLL projects CBD Grade A office rents to grow 4% to 5% in 2026, slightly higher than its 2025 full-year estimate of 3% to 4% growth.
CBRE’s Song has a similar view. “2026 is expected to be a landlord-favourable market, characterised by strong rental growth and a historically low vacancy rate,” she asserts. CBRE is forecasting rents for Core CBD Grade A offices to grow by about 4.9% next year, outpacing the 2.9% growth estimated for 2025.
Meanwhile, Cushman & Wakefield says CBD Grade A office rents are poised to rise by 4% to 7% in 2026, surging from 2% to 3% in 2025. “With a constrained supply pipeline, any potential surge in demand could place upward pressure on rents, with CBD Grade A offices positioned to benefit first."