CBD office rents continue subdued growth trajectory in 1Q2025
Situated in Tanjong Pagar, Keppel South Central was finished in early February. At the time, Keppel introduced that close to 50% of the space had actually been dedicated or was under settlement. The building has also secured its first anchor lessee, reportedly insurance firm Manulife.
Due for finalization in 2026, the development lately protected its first renter, co-working provider The Great Room. The firm announced earlier this month that it will open a 36,000 sq ft office in the establishment following year.
He predicts that most significant global firms with offices in Singapore are going to stay in a holding pattern until greater clarity arises on the worldwide landscape. Nonetheless, flight-to-quality moves may take place among some businesses upon lease expiration as they look for to right-size or reduce expenses. Knight Frank also expects prime office rental development to range between -1% to 2% for the whole of 2025.
Local workplace leas showed little modification in Q1 2025, based on data collected by JLL. The research discloses that CBD Grade An offices tracked by the consultancy reported a gross effective lease of $11.60 psf per month for the first quarter, edging up simply 0.5% q-o-q.
On The Other Hand, Knight Frank’s Yeo notes that apart from Shaw Tower, no contributions to the market are expected in the near term. This might position a difficulty for large-footprint occupiers, making relocations amongst such renters unlikely in the brief to medium term.
Tangye is positive about office space demand, noting that MNCs in Singapore are progressively adopting a complete return-to-office model while the financial services industry is rebounding. Last November, Barclays showed plans to establish Singapore as its second booking centre for Asia Pacific personal financial operations, while Standard Chartered declared a growth of its wealth management services in the city-state.
The trip to quality is set to drive need for brand-new workplace. Andrew Tangye, head of office leasing and advisory at JLL Singapore, notes that IOI Central Boulevard Towers, finished in 2024, is nearing 80% commitment. As a result, he expects need will certainly spill over to Keppel South Central and the anticipated growth of Shaw Tower.
The forecasted growth in need are going to accompany a drop in new workplace supply following the finalization of IOI Central Blvd Towers and Keppel South Central. “Supply of new office is readied to be constrained in between 2Q25 and 2027,” says Chua Yang Liang, head of research study and consultancy for JLL Southeast Asia. This would certainly “support moderate but sustained growth in office rents throughout this duration”, he includes.
Offices in some other locations islandwide presented q-o-q changes ranging from -0.3% to 3.4%.
“Although this relocation fad is not yet widespread, tenants are progressively thinking about cost-neutral options that consist of right-sizing and transferring to more modern workplace facilities in order to reduce expense,” notes Yeo. Furthermore, inhabitants might be incentivised to move as property managers offer subsidised fit-out costs or other benefits in a bid to maintain tenancy degrees.
Calvin Yeo, head of occupier strategy and options at Knight Frank, claims that in the middle of worldwide unpredictability, lots of inhabitants are opting to renew leases at existing properties. At the same time, others are beginning to look for high quality office as part of prospective flight-to-quality actions.
The marginal development continues the controlled trajectory in office rents over the last four quarters. CBD leas grew 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the lengthiest duration of modest variation in rents since we began tracking this information collection,” states JLL in a March 26 press release.
A separate record by Knight Frank spotted that prime grade workplace rents in the Raffles Place and Marina Bay district remained unchanged from the previous quarter, at $11.36 psf per month in 1Q2025. At the same time, the CBD occupancy level decreased marginally from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank attributes to the newly finished Keppel South Central.
