Prime Office Rents Rise 3q2025 Amid Limited Supply And Flight Quality Moves
According to recent research by real estate consultancies, rents for prime office space in Singapore continued to grow in the third quarter of 2025. In JLL’s latest quarterly office market report, it was found that Grade A office rents in the CBD increased by 1.3% quarter-on-quarter to reach $11.83 per square foot per month (psf pm), which is the largest quarterly growth seen in the past six quarters. This increase can largely be attributed to the addition of IOI Central Boulevard Towers to the properties monitored by JLL. However, even excluding this new addition, CBD office rents saw a growth of nearly 1%, which is on par with the past six quarters.
Dr Chua Yang Liang, head of research and consultancy for JLL Southeast Asia, stated that Singapore’s office market has been performing well. This can be attributed to a strong economy and a favorable interest rate environment. In a separate report by Knight Frank, it was found that prime grade office rents in the Raffles Place and Marina Bay areas grew by 0.3% quarter-on-quarter to an average of $11.41 psf pm in the third quarter of 2025. This is similar to the growth seen in the second quarter and brings the total rental growth for the first nine months of the year to 0.4%. However, occupancy levels for office spaces in these areas remained unchanged at 94.7%, while the overall CBD occupancy increased from 93.7% in the second quarter to 94.2% in the third quarter.
Knight Frank noted that the limited availability of office space, coupled with a cautious business environment, has led to a focus on lease renewals rather than new leasing activity. However, some occupiers have chosen to relocate to newer and better-quality buildings in order to right-size or expand. Examples include tech company Zoom Communications relocating from Asia Square Tower to IOI Central Boulevard Towers, and quantitative trading firm Jane Street planning to expand its space in the latter.
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Going forward, JLL expects CBD Grade A office rental growth to remain modest for the rest of 2025, reaching around 3% for the full year. However, in 2026, rental growth is expected to pick up pace due to a tightening supply pipeline. Andrew Tangye, head of office leasing and advisory for JLL Singapore, stated that as vacancy rates decrease between 2025-2027, larger office spaces will become harder to come by, potentially driving rental rates higher. Calvin Yeo, head of occupier strategy and solutions at Knight Frank Singapore, noted that upgrades to quality space have created a two-tier market where newer, well-connected buildings are thriving while older stock faces higher vacancy rates. With a limited supply of office space in the next few years, it is expected that quality buildings will remain almost fully occupied as more firms choose to upgrade from older buildings. In contrast, older and poorly connected buildings will face increasing pressure for redevelopment or modernization.
Considering the uncertain global environment, Knight Frank expects office occupiers to remain cautious in their decisions over the next 6-12 months. As a result, rental growth for prime offices is expected to remain fairly flat with some marginal growth in the last quarter of 2025 and the first half of 2026, according to the report.