Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of office leasing and advisory at JLL Singapore, states a growing trend of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many businesses in Singapore are progressing toward higher-value products and enhanced service models, causing a migration of some office demand from decentralised areas to CBD properties that much better suit their progressively sophisticated and client-oriented procedures,” he includes.
In contrast, office rents in the decentralised sub-market documented a downturn in 2Q2025, its first fall in 4 years. Rents in the market slipped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decrease is credited to recurring rightsizing efforts and tenants shifting to, or closer to, the CBD, driven by the boosted availability of space,” JLL includes.
As transfers carry on to sustain demand, office rents in the CBD are expected to stay moderate, with JLL predicting full-year development of 2% this year. Nevertheless, rental fees may pick up in 2025, amid minimal supply. “No huge workplace completions are anticipated for the next 12 months, with the brand-new Shaw Tower only happening onstream in 2H2026,” notes Chua.
In spite of ongoing financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective leas climbed 0.7% q-o-q to $11.69 psf monthly, marking a 5th straight quarter of sub-1% growth, according to JLL.
One example is Audi Singapore, which just recently relocated its business offices from Aperia on Kallang Avenue to Funding Square in the CBD. The move accompanied the display room’s change from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, says Tangye.
A lot more companies may be forced to move to the CBD due to “the present absence of a significant lease space in between CBD and decentralised workplaces”, states Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average rent space between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is lower the historical 50% to 60% rank.
The redevelopment of 79 Anson Road, which could begin next year, is anticipated to worsen supply restraints better, he adds.
Meanwhile, Tangye believes landlords with vacant area are concentrating on improving occupancy and securing portfolios ahead of 2026, when rents may start rising once again prior to new supply goes into the market in 2028. He includes: “By executing targeted property improvements, consisting of modernised entrance halls and restrooms, together with the restoration and renovation of obsolete workplace areas, homeowner are placing themselves to attract premium tenants and capitalise on the anticipated rental growth opportunities.”
