Decentralised office rents fall as firms relocate to CBD: JLL
As transfers continue to sustain demand, office rents in the CBD are expected to stay small, with JLL forecasting full-year growth of 2% this year. Nevertheless, rents may pick up in 2025, amidst limited supply. “No huge workplace conclusions are expected for the following 12 months, with the new Shaw Tower only happening onstream in 2H2026,” notes Chua.
Despite ongoing economic and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents increased 0.7% q-o-q to $11.69 psf per month, marking a fifth straight quarter of sub-1% growth, according to JLL.
At the same time, Tangye thinks property owners with uninhabited area are focusing on boosting occupancy and securing portfolios ahead of 2026, when leas may begin climbing once again prior to brand-new supply goes into the market in 2028. He includes: “By applying targeted property enhancements, including modernised entrance halls and bathrooms, in addition to the repair and renovation of out-of-date workplace areas, property owners are positioning themselves to bring in costs renters and capitalise on the anticipated rental growth opportunities.”
A lot more business might be compelled to transfer to the CBD due to “the existing absence of a substantial rent space in between CBD and decentralised workplaces”, states Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average lease space between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is below the historic 50% to 60% tier.
The redevelopment of 79 Anson Road, which could start following year, is expected to compound supply restrictions further, he includes.
One example is Audi Singapore, that recently moved its office spaces from Aperia on Kallang Avenue to Funding Square in the CBD. The decision coincided with the display room’s change from Alexandra Road to 18 Cross Street, simply a short walk from Capital Square, states Tangye.
Tembusu Grand condo floor plan
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says an increasing trend of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many services in Singapore are evolving towards higher-value offerings and improved service models, causing a movement of some workplace demand from decentralised locations to CBD premises that better accommodate their significantly sophisticated and client-oriented procedures,” he includes.
In contrast, workplace leas in the decentralised sub-market documented 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 monthly last quarter. “This decrease is attributed to ongoing rightsizing efforts and tenants moving to, or closer to, the CBD, motivated by the enhanced opportunity of space,” JLL adds.
