Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of office leasing and advisory at JLL Singapore, claims an increasing trend of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many businesses in Singapore are evolving towards higher-value services and enhanced company models, causing a migration of some workplace demand from decentralised areas to CBD premises that far better fit their increasingly sophisticated and client-oriented procedures,” he includes.
In contrast, office leas in the decentralised sub-market recorded a downturn in 2Q2025, its very first fall in four years. Rental fees in the market fell 0.8% q-o-q to $7.61 psf each month last quarter. “This decline is attributed to continuous rightsizing efforts and renters shifting to, or closer to, the CBD, motivated by the increased opportunity of space,” JLL adds.
One example is Audi Singapore, that most recently relocated its office spaces from Aperia on Kallang Avenue to Capital Square in the CBD. The relocation coincided with the showroom’s change from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, claims Tangye.
More firms may be urged to move to the CBD as a result of “the present absence of a significant rent gap in between CBD and decentralised workplaces”, claims Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rental fee gap between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is lesser the historic 50% to 60% rank.
The redevelopment of 79 Anson Road, that might commence next year, is expected to worsen supply restrictions better, he includes.
Meanwhile, Tangye believes property owners with uninhabited space are concentrating on increasing occupancy and securing profiles ahead of 2026, when leas may begin climbing once again prior to new supply enters the marketplace in 2028. He includes: “By carrying out targeted property enhancements, including modernised lobbies and washrooms, along with the reconstruction and improvement of outdated office locations, property owners are placing themselves to draw in premium lessees and capitalise on the awaited rental development possibilities.”
As relocations carry on to support need, workplace rental fees in the CBD are anticipated to stay modest, with JLL anticipating full-year growth of 2% this year. However, rents might pick up in 2025, amid minimal supply. “No huge workplace completions are expected for the next 12 months, with the brand-new Shaw Tower only coming onstream in 2H2026,” notes Chua.
Regardless of continuous financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective rental fees climbed 0.7% q-o-q to $11.69 psf each month, observing a 5th straight quarter of sub-1% growth, according to JLL.
