Decentralised office rents fall as firms relocate to CBD: JLL
A lot more firms may be forced to transfer to the CBD as a result of “the current absence of a substantial lease space in between CBD and decentralised offices”, says Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rent gap in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua says is lower the historic 50% to 60% tier.
In contrast, workplace leas in the decentralised sub-market reported a decline in 2Q2025, its very first fall in four years. Rents in the market dropped 0.8% q-o-q to $7.61 psf per month last quarter. “This decrease is attributed to continuous rightsizing efforts and tenants relocating to, or closer to, the CBD, stimulated by the boosted opportunity of space,” JLL adds.
Nava Grove Pine Grove and Ulu Pandan area
As relocations carry on to support need, office rental fees in the CBD are anticipated to continue to be modest, with JLL anticipating full-year development of 2% this year. Nevertheless, leas might pick up in 2025, in the middle of minimal supply. “No huge office conclusions are anticipated for the next 12 months, with the brand-new Shaw Tower only entering onstream in 2H2026,” notes Chua.
The redevelopment of 79 Anson Road, which can start following year, is expected to intensify supply constraints better, he includes.
One instance is Audi Singapore, that recently transferred its offices from Aperia on Kallang Avenue to Funding Square in the CBD. The decision coincided with the showroom’s shift from Alexandra Road to 18 Cross Street, simply a short stroll from Capital Square, says Tangye.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, states an expanding trend of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many services in Singapore are progressing towards higher-value products and improved service models, causing a migration of some office demand from decentralised areas to CBD facilities that better accommodate their progressively sophisticated and client-oriented operations,” he adds.
In spite of recurring financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents increased 0.7% q-o-q to $11.69 psf each month, noting a fifth straight quarter of sub-1% growth, according to JLL.
On the other hand, Tangye believes proprietors with uninhabited area are concentrating on boosting occupancy and stabilising portfolios ahead of 2026, when rents may start climbing again prior to new supply goes into the market in 2028. He adds: “By carrying out targeted property enhancements, including modernised lobbies and bathrooms, together with the reconstruction and remodelling of out-of-date office areas, property owners are positioning themselves to bring in premium renters and capitalise on the anticipated rental development chances.”
