Rising Rents and Strong Demand in Singapore’s Office Market
Singapore’s office market continued its upward trend during the third quarter of 2025, with Core CBD (Grade A) office rents increasing by 0.8% quarter-over-quarter. This marks the third consecutive quarter of rental growth, according to CBRE Research.
Gross effective rents for Grade A offices in the Core CBD rose to $12.20 per square foot per month, driven by strong demand from tenants and a limited supply of available space. Tricia Song, CBRE Head of Research for Singapore and Southeast Asia, highlighted the resilience of the market despite global economic uncertainties.
“Vacancy rates in the Core CBD have steadily tightened from 5.9% in Q1 2025 to 5.1% in Q3 2025,” she said. “This reflects sustained leasing momentum and a strong preference for high-quality office spaces.”
Key Developments in the Core CBD
One of the standout developments in the Core CBD is IOI Central Boulevard, which has achieved approximately 90% commitment by the end of Q3. As the last major Grade A completion in the area until 2028, it underscores the ongoing demand for premium office space in the city center.
Locations such as Marina Bay and Raffles Place remain highly sought after, with neighboring submarkets like Marina Centre and Beach Road/City Hall also performing well. These areas currently have less than 3% of space available, indicating tight supply conditions.
David McKellar, CBRE Head of Office Services in Singapore, noted that occupier activity remains broad-based, with sectors such as banking and finance, transport, government, and agile space operators driving demand. Outside the CBD, Paya Lebar Green, completed earlier this year, is now fully occupied following Visa’s relocation, which helped reduce vacancy rates in decentralised locations from 7.9% in Q2 to 6.5% in Q3.
From Q1 to Q3 2025, the market recorded net absorption of approximately 510,000 square feet (excluding stock removed for redevelopment). Office rents have grown by 2.1% year-to-date.
Supply Constraints and Future Outlook
Despite the current strength, supply constraints remain a challenge, especially for large occupiers seeking 200,000 to 300,000 square feet of contiguous space. Mr. McKellar pointed out that beyond strata and smaller redevelopments, upcoming options are limited. However, several projects are expected to come online in the coming years, including:
- Shaw Tower (2026)
- Skywaters (2027)
- Clifford Centre Redevelopment
- Comcentre Redevelopment (2028)
These developments may provide some relief in the long term, but the current tight supply environment is prompting occupiers to accelerate their decision-making to secure quality space before availability dwindles further.
Ms. Song concluded that CBRE Research maintains its 2025 rental growth forecast of approximately 3%. She added that there could be potential upside if interest rates ease, supporting continued occupier activity and more lease completions in the final quarter.
Investment Market Shows Strong Momentum
The office investment market also showed signs of recovery in Q3 2025, with deals surging seven-fold quarter-over-quarter to $1.794 billion. The largest transaction involved the sale of a 55% stake in CapitaSpring for $1.045 billion ($2,822 psf).
Michael Tay, CBRE Deputy Managing Director and Head of Capital Markets in Singapore, noted that the sector is experiencing a resurgence of positive sentiment, supported by strong fundamentals such as rent growth and limited future supply.
“The 3-month compounded SORA has fallen to 1.45%, positioning the sector favorably for yield-accretive returns,” he said. “Buoyed by robust enquiry levels and advanced deal negotiations, we anticipate investment momentum to stay strong through the remainder of the year.”