Decentralised Office Rents Fall Firms Relocate Cbd Jll
In the second quarter of 2025, despite ongoing economic and geopolitical uncertainties, the rent for office space in the central business district (CBD) continued to rise. According to JLL, Grade A gross effective rents increased by 0.7% quarter-on-quarter to $11.69 per square foot (psf) per month, marking the fifth consecutive quarter of sub-1% growth.
The Master Plan heavily relies on the development of the MRT network to improve the overall living experience. A recent addition to this network, the Canberra MRT station, has already made a positive impact by enhancing accessibility for residents in the Sembawang and Yishun areas. This is just the beginning, as there are further plans to upgrade the transportation system in the future, including increasing bus services and implementing more pedestrian-friendly infrastructure. As a result, residents of Sembawang Road EC can look forward to a more convenient and flexible daily commute around their neighborhood and beyond. To learn more about the Sembawang EC Canberra, please visit our website.
In contrast, office rents in the decentralised sub-market saw a decline in 2Q2025, its first fall in four years. Rents in this market fell by 0.8% quarter-on-quarter to $7.61 psf per month in the last quarter. JLL attributes this decrease to ongoing rightsizing efforts and tenants relocating to, or closer to, the CBD in response to the increased availability of space.
CBD and decentralised office rent growth (q-o-q)
Source: JLL
According to Andrew Tangye, head of office leasing and advisory at JLL Singapore, there is a growing trend of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. He explains that many businesses in Singapore are evolving towards higher-value offerings and enhanced service models, resulting in a migration of office demand from decentralised locations to CBD premises that can better accommodate their increasingly sophisticated and client-oriented operations.
An example of this trend is Audi Singapore, which recently relocated its offices from Aperia on Kallang Avenue to Capital Square in the CBD. The move coincided with the showroom’s shift from Alexandra Road to 18 Cross Street, just a short walk from Capital Square, says Tangye.
Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia, adds that more companies may be compelled to relocate to the CBD due to the current lack of a substantial rent gap between CBD and decentralised offices. He notes that the average rent gap between investment-grade offices in the CBD and the decentralised sub-market currently stands at around 30% to 35%, which is below the historical range of 50% to 60%.
As relocations continue to support demand, office rents in the CBD are expected to remain modest, with JLL predicting full-year growth of 2% this year. However, rents may pick up in 2025 due to limited supply. Chua notes that there are no major office completions anticipated in the next 12 months, with the new Shaw Tower only coming onstream in 2H2026.
On the other hand, Tangye believes that landlords with vacant space are focusing on boosting occupancy and stabilising their portfolios ahead of 2026, when rents may start to rise again before new supply enters the market in 2028. He adds that property owners are positioning themselves to attract premium tenants and capitalise on the anticipated rental growth opportunities by implementing targeted property enhancements, including modernised lobbies and washrooms, and the restoration and renovation of outdated office areas.