Local office rents showed little change in Q1 2025, based on data compiled by JLL. The research reveals that CBD Grade A offices tracked by the consultancy recorded a gross effective rent of $11.60 psf per month for the first quarter, edging up just 0.5% q-o-q.
The marginal growth continues the subdued trajectory in office rents over the last four quarters. CBD rents grew 0.4%, 0% and 0.7% q-o-q in 4Q2024, 3Q2024 and 2Q2024. “This marks the longest period of modest variation in rents since we began tracking this data series,” says JLL in a March 26 press release.
A separate report by Knight Frank found that prime grade office rents in the Raffles Place and Marina Bay precinct stayed unchanged from the previous quarter, at $11.36 psf per month in 1Q2025. At the same time, the CBD occupancy level declined marginally from 93.7% in the last quarter to 93.5% in 1Q2025, which Knight Frank attributes to the newly completed Keppel South Central.
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Located in Tanjong Pagar, Keppel South Central was completed in early February. At the time, Keppel announced that nearly 50% of the space had been committed or was under negotiation. The building has also secured its first anchor tenant, reportedly insurance firm Manulife.
Offices in other areas islandwide showed q-o-q changes ranging from -0.3% to 3.4%.
Calvin Yeo, head of occupier strategy and solutions at Knight Frank, says that amid global uncertainty, many occupiers are opting to renew leases at existing premises. At the same time, others are beginning to search for quality office spaces as part of potential flight-to-quality moves.
Although this relocation trend is not yet widespread, occupiers are increasingly considering cost-neutral options that include right-sizing and moving to more modern office facilities in order to minimise cost,” notes Yeo. In addition, occupiers may be incentivised to move as landlords offer subsidised fit-out costs or other benefits in a bid to maintain occupancy levels.
The flight to quality is set to
drive demand for new office space. Andrew Tangye, head of office leasing and advisory at JLL Singapore, notes that IOI Central Boulevard Towers, completed last year, is nearing 80% commitment. As a result, he anticipates demand will spill over to Keppel South Central and the forthcoming development of Shaw Tower.
Source: Edgeprop
