Singapore’s Central Business District office market is edging into 2026 with cautious demand and a tightening supply backdrop, as Grade A rents extended their upcycle for a seventh consecutive quarter, rising 0.3% quarter-on-quarter to S$9.96 psf per month in Q4 2025, while full-year growth accelerated to 1.8% from 1.1% in 2024. The rental uptrend has been underpinned by improving occupancy and limited near-term completions, even as leasing momentum moderated late in the year.
CBD Grade A rents rose for a seventh straight quarter to S$9.96 psf, supported by tightening supply despite softer leasing momentum.
Vacancy across the CBD eased to 6.7% in Q4 2025, down 0.3 percentage points quarter-on-quarter and 1.3 points from a year earlier, indicating progressive absorption in prime towers. Marina Bay vacancy fell by more than one point to 8.4%, while Raffles Place tightened by over one point to 4.2%, and City Hall remained the most constrained at 2.3%. At the same time, Beach Road and Middle Road registered modest vacancy increases, highlighting uneven performance as occupiers prioritised newer, higher-specification assets.
Tenant activity remained positive but more measured, with net take-up slowing to 88,000 sq ft in Q4 2025, although full-year net demand reached 941,000 sq ft, the strongest since 2019, and positive net demand was recorded for a fifth consecutive quarter. Demand was concentrated in Grade AAA offices, reflecting a sustained flight to quality led by larger, financially stronger occupiers, while non-Grade A buildings faced rising vacancy pressure as space decisions skewed toward consolidation and efficiency. Shadow office stock has declined to a nine-year low of 93,000 sq ft, further constraining the secondary options available to tenants seeking flexibility outside the prime market.
Rent dispersion by submarket and product band remained pronounced, with City Hall averaging S$10.58 psf in Q4 2025, Core CBD Grade A at S$12.30 psf, and top Grade A buildings transacting around a S$14.00 psf mode; upper mid-range space clustered near S$11.50 psf, and lower mid-range space between S$8.00 and S$9.00 psf. Office investment market activity increased as interest rates fell alongside rising rents. With the supply pipeline described as among the tightest in years versus other global hubs, and no significant new completions expected in the near term, occupiers have increasingly opted for renewals, while landlords have expanded fitted, plug-in-and-go offerings. Looking ahead, forecasts range from about 2% growth in 2026 CBD Grade A rents to 4–7%, including projections for 3–5% by end-2026 and a 4.9% rise to S$12.90 psf by Q4 2026. As supply conditions tighten further, the balance of power is expected to tilt toward landlords.
