Office Rents Slip 03 Q O Q 2Q2025 Wiping Out Gains Previous Quarter
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Singapore’s office market saw a decline in rents in 2Q2025, erasing the marginal gain recorded in 1Q2025. According to the latest URA statistics, rents fell by 0.3% q-o-q. This marks the first annual decline in office rents since 3Q2021.
Analysts attribute this decline to cautious sentiment among tenants and landlords amid ongoing uncertainty in the global economy. In particular, office rents in the Downtown Core and Orchard Road Planning area fell by 3.2% q-o-q to $11.68 psf/per month, while rents outside of this submarket increased by 2.7%.
Despite concerns about global economic headwinds, median rents for core Grade A offices increased by 1.3% in the first half of 2025. CBRE projects that office rents may continue to rise by 2%-3% for the rest of the year.
To maintain high occupancy rates, landlords have begun offering smaller spaces for rent and various incentives to bridge gaps in rental expectations. This has proven effective in driving occupancy in new developments such as IOI Central Boulevard.
While large corporations are unlikely to make significant relocation plans, small and medium-sized companies may make selective moves to take advantage of the current rental environment. Businesses are likely to delay leasing decisions until concerns over the US-China trade war and monetary policies in key economies are resolved.
Looking ahead, the supply of new office space is expected to be limited until 2028, which could further tighten vacancy rates. The recent extension of CBD Incentive and Strategic Development Incentive schemes may also see some office supply leave the market and be redeveloped into future mixed-use projects.