Decentralised office rents fall as firms relocate to CBD: JLL
Regardless of ongoing economic and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents increased 0.7% q-o-q to $11.69 psf monthly, noting a 5th straight quarter of sub-1% growth, according to JLL.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, states an expanding trend of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many services in Singapore are progressing toward higher-value services and enhanced company models, causing a movement of some workplace need from decentralised locations to CBD facilities that much better accommodate their progressively sophisticated and client-oriented procedures,” he includes.
On the other hand, Tangye thinks proprietors with uninhabited area are concentrating on boosting occupancy and securing portfolios ahead of 2026, when rents might begin increasing once again prior to new supply gets in the marketplace in 2028. He includes: “By implementing targeted property improvements, consisting of modernised lobbies and washrooms, in addition to the remediation and restoration of outdated office areas, homeowner are placing themselves to draw in premium tenants and capitalise on the anticipated rental growth possibilities.”
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More business may be compelled to transfer to the CBD as a result of “the current lack of a significant lease space in between CBD and decentralised workplaces”, says Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average rental fee void in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is lesser the historic 50% to 60% rank.
As relocations proceed to support need, workplace leas in the CBD are anticipated to remain modest, with JLL anticipating full-year development of 2% this year. However, rents might pick up in 2025, amid limited supply. “No major workplace conclusions are expected for the following 12 months, with the new Shaw Tower only coming onstream in 2H2026,” notes Chua.
In contrast, workplace leas in the decentralised sub-market reported a decline in 2Q2025, its very first fall in 4 years. Rental fees in the market dropped 0.8% q-o-q to $7.61 psf each month last quarter. “This decline is attributed to continuous rightsizing efforts and renters relocating to, or closer to, the CBD, driven by the boosted opportunity of space,” JLL adds.
One instance is Audi Singapore, which most recently moved its business from Aperia on Kallang Avenue to Resources Square in the CBD. The relocation coincided with the display room’s shift from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, says Tangye.
The redevelopment of 79 Anson Road, which can start following year, is expected to worsen supply restraints better, he includes.
