CBD office rents continue subdued growth trajectory in 1Q2025
A different record by Knight Frank discovered that prime grade workplace rents in the Raffles Place and Marina Bay district stayed unmodified from the last quarter, at $11.36 psf per month in 1Q2025. At the same time, the CBD occupancy level declined marginally from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank connects to the recently finished Keppel South Central.
The trip to quality is set to drive demand for brand-new workplace. Andrew Tangye, head of office leasing and advisory at JLL Singapore, notes that IOI Central Blvd Towers, finished last year, is nearing 80% commitment. As a result, he expects demand will spill over to Keppel South Central and the forthcoming development of Shaw Tower.
Offices in other locations islandwide presented q-o-q changes ranging from -0.3% to 3.4%.
Found in Tanjong Pagar, Keppel South Central was completed in very early February. During the time, Keppel announced that close to 50% of the space had been devoted or was under negotiation. The building has also secured its initial support tenant, reportedly insurance company Manulife.
Calvin Yeo, head of occupier strategy and options at Knight Frank, claims that amid global uncertainty, lots of inhabitants are opting to restore rent at existing properties. At the same time, others are starting to search for high quality office as part of possible flight-to-quality relocations.
The predicted growth in demand will accompany a drop in new workplace source following the conclusion of IOI Central Blvd Towers and Keppel South Central. “Supply of new office space is set to be constricted between 2Q25 and 2027,” says Chua Yang Liang, head of research study and consultancy for JLL Southeast Asia. This would “sustain moderate but sustained development in office rents throughout this period”, he adds.
Due for finalization in 2026, the property development recently protected its initial occupant, co-working company The Great Room. The business revealed earlier this month that it will certainly open a 36,000 sq ft work space in the property following year.
“Although this moving pattern is not yet extensive, occupiers are progressively considering cost-neutral options that consist of right-sizing and moving to more modern office facilities in order to reduce expense,” notes Yeo. Furthermore, occupiers might be incentivised to relocate as landlords offer subsidised fit-out costs or other advantages in a quote to preserve occupancy levels.
On The Other Hand, Knight Frank’s Yeo notes that in addition to Shaw Tower, no contributions to the market are anticipated in the nearby term. This could position a difficulty for large-footprint inhabitants, making relocations amongst such tenants unlikely in the brief to medium term.
He anticipates that most significant global firms with workplaces in Singapore will remain in a holding pattern till higher clearness arises on the global landscape. However, flight-to-quality moves might occur among some companies upon lease expiry as they look for to right-size or minimize prices. Knight Frank also anticipates prime office rental development to range between -1% to 2% for the whole of 2025.
Tangye is optimistic about workplace need, keeping in mind that MNCs in Singapore are progressively embracing a full return-to-office model while the financial services field is rebounding. Last November, Barclays disclosed strategies to set up Singapore as its 2nd reservation centre for Asia Pacific personal banking affairs, while Standard Chartered announced a development of its wealth management programs in the city-state.
The marginal growth continues the subdued movement in office rentals over the last four quarters. CBD rental fees expanded 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the longest period of modest variation in rents since we started tracking this information collection,” claims JLL in a March 26 news release.
Local office rental fees showed little modification in Q1 2025, based on information collected by JLL. The research discloses that CBD Quality An office spaces traced by the consultancy reported a gross efficient rent of $11.60 psf monthly for the very first quarter, outlining up simply 0.5% q-o-q.
