Singapore’s core CBD Grade A office market extended its upward trajectory in Q1 2026, with rents rising 0.8% quarter-on-quarter to S$12.40 psf per month, the fifth consecutive quarterly increase, as vacancy tightened to a record-low 3.3% amid limited prime supply and sustained occupier demand. The latest increase reinforced a sustained recovery in prime office pricing, with market conditions increasingly favouring landlords as occupiers competed for scarce high-quality space in the city centre. CBRE said the office market tightened further during the quarter, reinforcing landlords’ pricing power.
Singapore’s core CBD Grade A office rents climbed for a fifth straight quarter as vacancy fell to a record 3.3%.
Across the broader CBD, office occupancy eased marginally to 94.7% in Q1, though this still represented a 1.2 percentage-point improvement year-on-year and reflected materially tighter conditions than periods when vacancies had risen to 7.8% following new completions.
The rental trajectory was supported by continued flight-to-quality demand, particularly from banking institutions, non-bank financial services firms, professional services occupiers, and technology companies, all of which remained focused on modern buildings that strengthen talent attraction, workplace experience, and sustainability credentials.
In several cases, heightened competition for premium premises resulted in space being re-let before incumbent tenants had vacated, underscoring the imbalance between demand and immediately available supply. Raffles Place and Marina Bay, the core precincts of the premium market, recorded average rents of S$11.57 psf per month, up 0.7% quarter-on-quarter, while these assets also outperformed peripheral locations through stronger rental reversions.
Supply constraints remained central to market performance. Investment-grade office completions scheduled for 2026 and 2027 are projected to be the lowest in three years, extending a supply squeeze that has already curtailed prime availability and underpinned rental stability despite global uncertainty. CBRE separately projects Hong Kong and Singapore prime office rents will reach price parity by Q4 2027, with Singapore edging slightly higher at about US$123 per square foot per year versus just over US$122 in Hong Kong.
Although new projects such as IOI Central Boulevard Towers had previously lifted vacancy levels, current conditions indicate that the bulk of quality supply is being absorbed efficiently. Market participants also noted a defensive landlord orientation amid Middle East conflict, with Singapore continuing to benefit from its safe-haven status and stable business environment. Adding further pressure on available stock, shadow office space across the CBD fell to a nine-year low of 93,000 sq ft in Q3 2025, removing a key buffer that had previously allowed occupiers to access sublease options outside the primary leasing market.
Looking ahead, market expectations remain constructive. Analysts forecast Grade A office rents could rise about 5% year-on-year by end-2026, with around 2% growth anticipated over 2026 as constrained supply meets healthy occupier demand.
