Decentralised office rents fall as firms relocate to CBD: JLL
The redevelopment of 79 Anson Road, that can start following year, is expected to worsen supply constraints even more, he includes.
On the other hand, Tangye believes landlords with uninhabited space are concentrating on boosting occupancy and stabilising portfolios ahead of 2026, when rental fees might begin rising again before new supply enters the market in 2028. He includes: “By applying targeted property enhancements, including modernised entrance halls and washrooms, in addition to the remediation and improvement of obsolete office areas, homeowner are placing themselves to draw in premium renters and capitalise on the expected rental growth possibilities.”
A lot more business may be compelled to transfer to the CBD as a result of “the present absence of a considerable lease gap between CBD and decentralised workplaces”, claims Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rent void between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua states is below the historical 50% to 60% range.
One example is Audi Singapore, which most recently relocated its office spaces from Aperia on Kallang Avenue to Funding Square in the CBD. The decision accompanied the showroom’s shift from Alexandra Road to 18 Cross Street, just a brief walk from Capital Square, states Tangye.
In contrast, office rents in the decentralised sub-market reported a downturn in 2Q2025, its first fall in four years. Rental fees in the market slipped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decrease is credited to ongoing rightsizing efforts and renters relocating to, or closer to, the CBD, stimulated by the enhanced availability of space,” JLL adds.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, claims a growing trend of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. “Many businesses in Singapore are progressing towards higher-value offerings and improved service models, causing a migration of some workplace demand from decentralised areas to CBD premises that far better fit their progressively sophisticated and client-oriented operations,” he includes.
As transfers proceed to sustain need, office rents in the CBD are expected to stay modest, with JLL predicting full-year development of 2% this year. However, rental fees might pick up in 2025, amid limited supply. “No significant workplace completions are anticipated for the next 12 months, with the brand-new Shaw Tower only happening onstream in 2H2026,” notes Chua.
Regardless of continuous financial and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective leas rose 0.7% q-o-q to $11.69 psf per month, observing a 5th straight quarter of sub-1% growth, according to JLL.
