Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says a growing pattern of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many services in Singapore are progressing towards higher-value products and improved service models, causing a migration of some office need from decentralised places to CBD premises that far better fit their increasingly sophisticated and client-oriented operations,” he includes.
On the other hand, Tangye thinks landlords with vacant room are focusing on enhancing occupancy and stabilising profiles ahead of 2026, when leas may begin rising once again before brand-new supply goes into the market in 2028. He adds: “By implementing targeted property enhancements, consisting of modernised lobbies and washrooms, in addition to the remediation and renovation of outdated workplace areas, homeowner are positioning themselves to bring in costs occupants and capitalise on the anticipated rental growth chances.”
One instance is Audi Singapore, which just recently moved its business from Aperia on Kallang Avenue to Resources Square in the CBD. The decision accompanied the display room’s change from Alexandra Road to 18 Cross Street, just a brief stroll from Capital Square, says Tangye.
As relocations carry on to sustain need, workplace leas in the CBD are anticipated to remain modest, with JLL forecasting full-year growth of 2% this year. However, rental fees might pick up in 2025, amidst minimal supply. “No major office completions are anticipated for the next 12 months, with the brand-new Shaw Tower only happening onstream in 2H2026,” notes Chua.
On the other hand, office leas in the decentralised sub-market recorded 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 each month last quarter. “This decline is attributed to recurring rightsizing efforts and renters shifting to, or closer to, the CBD, stimulated by the boosted opportunity of space,” JLL includes.
The redevelopment of 79 Anson Road, that could start following year, is expected to worsen supply restraints better, he includes.
More business may be urged to transfer to the CBD because of “the current absence of a substantial rental fee space in between CBD and decentralised offices”, claims Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rent void in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is below the historic 50% to 60% rank.
In spite of recurring financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents climbed 0.7% q-o-q to $11.69 psf per month, noting a 5th straight quarter of sub-1% growth, according to JLL.
