Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, claims an increasing pattern of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many services in Singapore are evolving towards higher-value offerings and enhanced company models, causing a movement of some workplace need from decentralised locations to CBD facilities that much better suit their progressively sophisticated and client-oriented procedures,” he adds.
Despite ongoing economic and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective rents rose 0.7% q-o-q to $11.69 psf each month, marking a fifth straight quarter of sub-1% growth, according to JLL.
A lot more companies might be urged to transfer to the CBD due to “the current absence of a considerable rental fee space in between CBD and decentralised offices”, claims Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average lease space in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is lesser the historical 50% to 60% rank.
The redevelopment of 79 Anson Road, which can begin following year, is anticipated to worsen supply restrictions even more, he adds.
On the other hand, office leas in the decentralised sub-market recorded a decline in 2Q2025, its first fall in four years. Rents in the market slipped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decline is credited to ongoing rightsizing efforts and occupants relocating to, or closer to, the CBD, motivated by the enhanced availability of space,” JLL adds.
As transfers proceed to sustain demand, office rents in the CBD are anticipated to stay small, with JLL predicting full-year growth of 2% this year. However, rental fees may pick up in 2025, amid restricted supply. “No major office completions are expected for the following 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
Meanwhile, Tangye thinks proprietors with vacant area are concentrating on improving occupancy and stabilising portfolios ahead of 2026, when rental fees might begin rising again before new supply gets in the market in 2028. He includes: “By carrying out targeted property improvements, including modernised entrance halls and restrooms, together with the reconstruction and restoration of obsolete workplace areas, homeowner are positioning themselves to draw in premium renters and capitalise on the expected rental growth possibilities.”
One example is Audi Singapore, which most recently relocated its offices from Aperia on Kallang Avenue to Capital Square in the CBD. The shift accompanied the display room’s shift from Alexandra Road to 18 Cross Street, just a short walk from Capital Square, says Tangye.
