Prime office rents rise in 3Q2025 amid limited supply and flight-to-quality moves

Kalynskye Adrian

/ EdgeProp Singapore

September 29, 2025 3:50 PM SGT

propertyeditor@edgeprop.sg

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Knight Frank’s report found that occupancy levels for office spaces in the Raffles Place and Marina Bay precinct remained unchanged at 94.7%, while overall CBD occupancy increased from 93.7% in 2Q2025 to 94.2% in 3Q2025. (Photo: Samuel Isaac Chua/Edgeprop Singapore)

Rents for prime office space in Singapore continued growing in 3Q2025, based on research from real estate consultancies. In its latest quarterly office market report, JLL’s research shows that Grade A office rents in the CBD increased 1.3% q-o-q to $11.83 psf per month (psf pm) last quarter, the largest quarterly growth in six quarters.

The higher growth was primarily attributed to the addition of IOI Central Boulevard Towers to the basket of properties monitored by JLL. Excluding IOI Central Boulevard Towers, CBD office rents rose by less than 1%, on par with the past six quarters.

“Singapore’s office market has been holding up well, in part supported by stronger-than-anticipated economic fundamentals and a more conducive interest rate environment,” says Dr Chua Yang Liang, head of research and consultancy for JLL Southeast Asia.

In a separate report, research by Knight Frank indicates prime grade office rents in the Raffles Place and Marina Bay areas grew 0.3% q-o-q to hit an average of $11.41 psf pm in 3Q2025. This is similar to the 0.2% q-o-q growth recorded in 2Q2025, and brings total rental growth for the first nine months of the year to 0.4%.

Knight Frank’s report found that occupancy levels for office spaces in the Raffles Place and Marina Bay precinct remained unchanged at 94.7%, while overall CBD occupancy increased from 93.7% in 2Q2025 to 94.2% in 3Q2025.

The limited available supply, coupled with a cautious business environment, led to leasing activity being predominantly driven by lease renewals, says Knight Frank. However, select occupiers, especially those with expiring leases, are choosing to relocate to newer, better-quality buildings in tandem with right-sizing or measured expansion. Examples of these include tech company Zoom Communications relocating from Asia Square Tower to IOI Central Boulevard Towers, while quantitative trading firm Jane Street is planning to expand its space in the latter.

Looking ahead, JLL anticipates CBD Grade A office rental growth to remain modest for the rest of 2025, with full-year growth projected to reach approximately 3%. Going into 2026, JLL predicts office rental growth to pick up pace, supported by a tightening supply pipeline. “As vacancy rates are projected to tighten between 2025-2027, whole-floor and multi-floor opportunities will become increasingly limited, potentially driving rental rates beyond some tenants' budget parameters,” remarks Andrew Tangye, head of office leasing and advisory for JLL Singapore.

Calvin Yeo, head of occupier strategy and solutions at Knight Frank Singapore, observes that “selective upgrades to quality space have created a two-tier market where newer, well-connected buildings thrive and older stock faces growing vacancy pressure.”

Given the limited office stock in the next few years, he expects quality buildings to remain almost fully occupied as more firms make flight-to-quality moves from older buildings. In contrast, older and poorly connected buildings will face increasing pressures to be redeveloped or modernised.

Given the uncertain global environment, Knight Frank expects sentiment to remain cautious among office occupiers over the next six to 12 months. “As such, prime rental growth for the last quarter of 2025 is expected to remain fairly flat with some marginal growth, with more of the same going into the first half of 2026,” the report states.

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Prime office rents rise in 3Q2025 amid limited supply and flight-to-quality moves

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