Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, states a growing trend of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many businesses in Singapore are developing towards higher-value services and improved company models, causing a movement of some office demand from decentralised locations to CBD premises that much better accommodate their increasingly sophisticated and client-oriented operations,” he includes.
The redevelopment of 79 Anson Road, that could begin following year, is anticipated to compound supply constraints further, he adds.
More firms might be urged to transfer to the CBD because of “the current absence of a significant lease space in between CBD and decentralised offices”, states Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average lease gap in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua states is below the historic 50% to 60% range.
One instance is Audi Singapore, that recently relocated its offices from Aperia on Kallang Avenue to Resources Square in the CBD. The move accompanied the showroom’s change from Alexandra Road to 18 Cross Street, simply a brief walk from Capital Square, says Tangye.
On the other hand, office rental fees in the decentralised sub-market recorded a downturn in 2Q2025, its first fall in 4 years. Leas in the market dropped 0.8% q-o-q to $7.61 psf each month last quarter. “This decrease is credited to continuous rightsizing efforts and tenants relocating to, or closer to, the CBD, stimulated by the increased opportunity of space,” JLL adds.
Otto Place Hoi Hup Realty & Sunway Group
As transfers proceed to sustain need, workplace rental fees in the CBD are expected to stay moderate, with JLL predicting full-year development of 2% this year. Nevertheless, rents may pick up in 2025, amid limited supply. “No significant workplace conclusions are expected for the next 12 months, with the brand-new Shaw Tower only happening onstream in 2H2026,” notes Chua.
At the same time, Tangye thinks property managers with uninhabited area are focusing on improving occupancy and stabilising profiles ahead of 2026, when rents might begin increasing once more prior to new supply goes into the marketplace in 2028. He includes: “By carrying out targeted property improvements, including modernised lobbies and bathrooms, together with the repair and remodelling of outdated workplace locations, property owners are positioning themselves to draw in premium occupants and capitalise on the awaited rental growth chances.”
Regardless of ongoing financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective leas increased 0.7% q-o-q to $11.69 psf monthly, marking a 5th straight quarter of sub-1% growth, according to JLL.
