Prime Office Rents Rise 3q2025 Amid Limited Supply And Flight Quality Moves
During the third quarter of 2025, research conducted by various real estate consultancies showed an increase in rents for prime office space in Singapore. According to JLL’s quarterly office market report, Grade A office rents in the CBD grew 1.3% quarter-on-quarter to reach $11.83 per square foot (psf) per month, marking the biggest growth in six quarters.
This boost in growth can be largely attributed to the inclusion of IOI Central Boulevard Towers in JLL’s monitored basket of properties. However, when excluding this property, CBD office rents only rose slightly by less than 1%, remaining consistent with the past six quarters.
Dr Chua Yang Liang, head of research and consultancy for JLL Southeast Asia, believes that Singapore’s office market has been performing well thanks to a strong economy and favourable interest rates.
In a separate report, Knight Frank’s research found that prime grade office rents in the Raffles Place and Marina Bay areas also saw a growth of 0.3% q-o-q, reaching an average of $11.41 psf per month in 3Q2025. This is similar to the growth seen in the previous quarter, bringing total rental growth for the first nine months of the year to 0.4%.
The report also noted that occupancy levels for office spaces in the Raffles Place and Marina Bay precinct remained stable at 94.7%, while overall CBD occupancy increased from 93.7% in 2Q2025 to 94.2% in 3Q2025. Knight Frank attributes this to the limited supply of office space and a cautious business environment, which has led to leasing activity being driven mainly by lease renewals.
However, there are still select occupiers who are choosing to relocate to newer and better-quality buildings while also right-sizing or expanding their space. Examples of this include Zoom Communications, which moved from Asia Square Tower to IOI Central Boulevard Towers, and Jane Street, a quantitative trading firm that is planning to expand its space in the latter.
Looking ahead, JLL predicts that rental growth for CBD Grade A office space will remain modest for the rest of 2025, with a projected full-year growth of approximately 3%. Going into 2026, the consultancy anticipates a pick-up in rental growth as the supply pipeline tightens.
Andrew Tangye, head of office leasing and advisory for JLL Singapore, notes that as vacancy rates are expected to decrease between 2025-2027, rental rates may increase beyond the budget of certain tenants. Calvin Yeo, head of occupier strategy and solutions at Knight Frank Singapore, adds that selective upgrades to quality space have resulted in a two-tier market where newer, well-connected buildings are in high demand while older stock faces increased vacancy pressure.
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Given the limited office stock in the next few years, Knight Frank expects quality buildings to remain almost fully occupied as more firms choose to move from older buildings to newer and better-quality ones. On the other hand, older and poorly connected buildings may face pressure to be redeveloped or modernised.
Due to the uncertain global environment, Knight Frank predicts that sentiment among office occupiers will remain cautious in the next six to 12 months. As such, prime rental growth for the last quarter of 2025 is expected to remain flat with some marginal growth, followed by a similar trend in the first half of 2026.