How severe will Singapore’s office supply constraints become over the coming years? Annual new office completions between 2025 and 2027 are projected to range from 800,000 to 1.6 million square feet, with the islandwide average of 832,600 square feet annually falling notably below the 10-year historical average of 1.6 million square feet.
Singapore’s annual office completions will fall nearly 50% below historical averages through 2027, signalling significant supply constraints ahead.
This supply deficit follows a 2024 spike that added 2.5 million square feet to the market, creating a sharp contrast with the constrained pipeline now emerging. Supply may be further reduced as stock withdrawals and redevelopment activities offset new completions during this period.
The CBD Grade A segment faces particularly acute limitations, with total supply for 2026-2027 amounting to just 0.6 million square feet, translating to an annual average of 0.3 million square feet. This annual average represents approximately one-third of historical net demand, underscoring the severity of the supply-demand imbalance.
No major developments are scheduled until after 2028, intensifying pressure on available premium inventory.
Key completions shaping the near-term landscape include IOI Central Boulevard Towers in 2024-2025, Keppel South Central in 2025, Shaw Tower Redevelopment in 2026, and Newport Tower in 2027.
Vacancy trends already reflect tightening conditions, with islandwide vacancy declining to 11.2% in Q3 2025 from 11.7% in Q1 and 11.4% in Q2.
CBD Grade A vacancy compressed further to 4.7% in Q3 2025 from 5.2% the previous quarter, while shadow office space in this segment reached a nine-year low of 93,000 square feet.
These metrics indicate diminishing options for occupiers seeking premium accommodations in central locations.
Demand fundamentals remain robust, with relocation and rightsizing activities accounting for 67.1% of leasing transactions.
Flight-to-quality and re-centralisation trends continue driving occupier decisions, supported by increasing office-use employment.
Net absorption for CBD Grade A space reached 197,000 square feet in Q3 2025, following 185,000 square feet in Q2, demonstrating sustained appetite for quality office environments.
The rental implications of these dynamics are becoming increasingly apparent, with CBD Grade A rents rising 0.5% quarter-on-quarter in Q3 2025.
Rents are expected to continue their upward trajectory into 2026, driven by tight supply conditions and persistent flight-to-quality demand. Rising construction costs and high replacement costs further support the upward pressure on rental rates as developers face elevated expenses for new projects.
Should re-centralisation trends intensify, the supply shortage could become severe in 2026, positioning landlords for more aggressive rent expectations as premium vacancy continues to decrease and stable rental growth materialises across the market.
