Singapore’s prime office market is entering 2026 with a distinctly tightening supply-demand balance, as CBD Grade A vacancy fell to 4.7% in Q3 2025 from 5.2% in the previous quarter.
New completions over 2026–2027 are projected to be materially below historical net annual demand. This contraction in vacancy is occurring alongside a *particularly* thin new-supply pipeline, with only about 0.6 million square feet of CBD Grade A stock scheduled over 2026–2027, representing roughly one‑third of typical historical net annual demand.
New CBD Grade A supply in 2026–2027 is just one‑third of typical historical net annual demand
This implies intensifying competition for prime space. Pipeline additions are highly concentrated in a small number of schemes, with Shaw Tower due in mid‑2026 and Newport Tower in 2027. About 22% of this upcoming CBD Grade A space is already under offer, a dynamic that further constrains effective availability. Singapore’s prime office sector is increasingly viewed by investors as a “top pick” for 2026, reinforcing expectations of stronger rental growth as tightening leasing fundamentals intersect with robust capital flows.
Shadow space has also diminished, with CBD Grade A shadow office stock declining to 93,000 square feet in Q3 2025— a nine‑year low— underscoring limited secondary options for occupiers seeking immediate, high‑quality accommodation.
Against this backdrop, CBD Grade A rents rose 0.5% quarter‑on‑quarter in Q3 2025, extending a trajectory that saw approximately 2% rental growth over 2024. A projected moderate increase of around 2% is expected in 2025, with market participants widely anticipating stronger acceleration into 2026. Supported by a 31.0% qoq jump in overall real estate investment volumes to $9.3 billion in Q3 2025, the office segment is poised to benefit from heightened capital allocation towards income‑resilient assets.
Survey evidence indicates that 89% of respondents expect prime rents to rise. Two‑thirds foresee increases exceeding 2% in 2026, reflecting expectations that tightening fundamentals will translate directly into firmer pricing.
Demand is being shaped by a *clear* flight to quality. 82% of respondents expect take‑up to strengthen as corporates consolidate into fewer but higher‑specification premises, often via renewals rather than relocations due to capital expenditure constraints.
There is also a growing recourse to short‑term and plug‑and‑play fitted solutions that typically command rental premia. Net absorption of CBD Grade A space remained healthy at 197,000 square feet in Q3 2025 after 185,000 square feet in Q2, while displacement demand from redevelopment activity is expected to add further relocation‑led requirements.
These conditions are reinforced by strengthening investment indicators, including a 28% year‑on‑year rise in Singapore real estate investment volumes to US$4.2 billion in Q4 2025.
Ongoing interest from private Chinese capital is also contributing to market momentum, alongside resilient employment in outward‑oriented service sectors that is expected to support sustained demand for high‑quality offices through 2026.
