Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, states an increasing pattern of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many services in Singapore are developing toward higher-value offerings and improved company models, causing a migration of some workplace demand from decentralised areas to CBD facilities that better fit their increasingly sophisticated and client-oriented procedures,” he adds.
Meanwhile, Tangye believes property managers with uninhabited room are concentrating on boosting occupancy and stabilising profiles ahead of 2026, when rental fees might start climbing again before brand-new supply gets in the market in 2028. He adds: “By carrying out targeted property enhancements, consisting of modernised lobbies and bathrooms, together with the restoration and remodelling of out-of-date office locations, property owners are placing themselves to bring in premium tenants and capitalise on the anticipated rental growth possibilities.”
In contrast, office leas in the decentralised sub-market reported a decline in 2Q2025, its very first fall in four years. Rental fees in the market slipped 0.8% q-o-q to $7.61 psf each month last quarter. “This decline is credited to continuous rightsizing efforts and occupants relocating to, or closer to, the CBD, motivated by the boosted availability of space,” JLL includes.
The redevelopment of 79 Anson Road, that could begin following year, is anticipated to compound supply constraints further, he includes.
As relocations proceed to sustain demand, office leas in the CBD are expected to stay modest, with JLL forecasting full-year growth of 2% this year. Nevertheless, leas may pick up in 2025, in the middle of limited supply. “No significant workplace conclusions are expected for the next 12 months, with the new Shaw Tower only happening onstream in 2H2026,” notes Chua.
One example is Audi Singapore, that just recently transferred its offices from Aperia on Kallang Avenue to Capital Square in the CBD. The decision accompanied the display room’s shift from Alexandra Road to 18 Cross Street, simply a short walk from Capital Square, says Tangye.
More companies might be obliged to move to the CBD because of “the current lack of a considerable lease space in between CBD and decentralised workplaces”, says Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rental fee gap in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is lesser the historic 50% to 60% range.
Despite ongoing financial and geopolitical uncertainties, CBD office rents edged up again in 2Q2025. Grade A gross effective rents rose 0.7% q-o-q to $11.69 psf per month, noting a 5th straight quarter of sub-1% growth, according to JLL.
