Decentralised office rents fall as firms relocate to CBD: JLL
The redevelopment of 79 Anson Road, which can commence following year, is expected to worsen supply restraints additionally, he includes.
In contrast, office rents in the decentralised sub-market reported a downtrend in 2Q2025, its first fall in 4 years. Leas in the market dropped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decrease is credited to ongoing rightsizing efforts and tenants relocating to, or closer to, the CBD, driven by the enhanced availability of space,” JLL includes.
One example is Audi Singapore, that recently moved its business from Aperia on Kallang Avenue to Capital Square in the CBD. The shift accompanied the showroom’s change from Alexandra Road to 18 Cross Street, simply a brief walk from Capital Square, says Tangye.
A lot more firms might be obliged to relocate to the CBD due to “the present absence of a significant rent space in between CBD and decentralised offices”, states Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rental fee gap in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua says is lesser the historic 50% to 60% range.
As relocations continue to support demand, office leas in the CBD are expected to continue to be moderate, with JLL predicting full-year growth of 2% this year. However, rental fees may pick up in 2025, amid limited supply. “No major office completions are anticipated for the following 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, claims a growing pattern of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many businesses in Singapore are evolving toward higher-value services and enhanced service models, causing a migration of some office need from decentralised areas to CBD premises that much better fit their significantly sophisticated and client-oriented operations,” he includes.
Meanwhile, Tangye thinks landlords with vacant room are concentrating on increasing occupancy and securing portfolios ahead of 2026, when rental fees may start climbing again prior to brand-new supply enters the marketplace in 2028. He includes: “By applying targeted property improvements, consisting of modernised entrance halls and restrooms, in addition to the remediation and improvement of obsolete office locations, homeowner are positioning themselves to bring in premium renters and capitalise on the awaited rental development possibilities.”
Regardless of ongoing financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective rents increased 0.7% q-o-q to $11.69 psf each month, marking a fifth straight quarter of sub-1% growth, according to JLL.
