Prime Office Rents Rise 3q2025 Amid Limited Supply And Flight Quality Moves
In the third quarter of 2025, the research conducted by real estate consultancies shows that the rental rates for prime office space in Singapore continued to increase. According to JLL’s latest quarterly office market report, Grade A office rents in the Central Business District (CBD) rose by 1.3% quarter-on-quarter (q-o-q) to $11.83 per square feet (psf) per month, which is the highest growth in six quarters.
This growth can primarily be attributed to the addition of IOI Central Boulevard Towers to the properties monitored by JLL. However, if this property is excluded, the rental rates for CBD office spaces only increased by less than 1%, which is comparable to the past six quarters.
Dr. Chua Yang Liang, the head of research and consultancy for JLL Southeast Asia, notes that the Singapore office market has been performing well due to strong economic fundamentals and a favorable interest rate environment.
In a separate report by Knight Frank, it was found that prime grade office rents in Raffles Place and Marina Bay areas also increased by 0.3% q-o-q to an average of $11.41 psf per month in the third quarter of 2025. This growth is in line with the 0.2% q-o-q growth recorded in the previous quarter and brings the total rental growth for the first nine months of the year to 0.4%.
Knight Frank’s report also states that the occupancy levels for office spaces in Raffles Place and Marina Bay remain unchanged at 94.7%, while the overall CBD occupancy rose from 93.7% in the second quarter to 94.2% in the third quarter.
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The limited supply of office spaces, coupled with a cautious business environment, has led to leasing activity mainly being driven by lease renewals, according to Knight Frank. However, some occupiers with expiring leases are choosing to relocate to newer and better-quality buildings while also right-sizing or expanding their space. For example, tech company Zoom Communications moved from Asia Square Tower to IOI Central Boulevard Towers, and quantitative trading firm Jane Street plans to expand its space in the latter.
Looking ahead, JLL predicts that the rental growth for Grade A office spaces in the CBD will remain modest for the rest of 2025, with a projected full-year growth of around 3%. Going into 2026, JLL expects the rental rates to accelerate, supported by a tightening supply pipeline. Andrew Tangye, the head of office leasing and advisory for JLL Singapore, states that as vacancy rates are expected to tighten between 2025-2027, rental rates for whole-floor and multi-floor spaces may exceed some tenants’ budget parameters.
Calvin Yeo, the head of occupier strategy and solutions at Knight Frank Singapore, observes that selective upgrades to quality space have created a two-tier market, with newer and well-connected buildings performing well while older buildings face increasing vacancy pressure. Given the limited office stock in the next few years, he expects quality buildings to remain almost fully occupied as more firms opt for newer and better-connected buildings. On the other hand, older and poorly connected buildings will face pressure to redevelop or modernize.
Given the uncertain global environment, Knight Frank expects office occupiers to remain cautious over the next six to twelve months. Hence, the report states that prime rental growth for the last quarter of 2025 is expected to remain flat with marginal growth, and a similar trend is expected in the first half of 2026.