Decentralised office rents fall as firms relocate to CBD: JLL
The redevelopment of 79 Anson Road, which can commence following year, is anticipated to worsen supply constraints further, he includes.
As transfers continue to support demand, workplace leas in the CBD are expected to remain small, with JLL predicting full-year growth of 2% this year. However, leas may pick up in 2025, amid restricted supply. “No significant office conclusions are expected for the next 12 months, with the new Shaw Tower only happening onstream in 2H2026,” notes Chua.
In spite of ongoing financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents climbed 0.7% q-o-q to $11.69 psf per month, noting a 5th straight quarter of sub-1% growth, according to JLL.
On the other hand, workplace rental fees in the decentralised sub-market recorded a decline in 2Q2025, its first fall in 4 years. Leas in the market fell 0.8% q-o-q to $7.61 psf per month last quarter. “This decrease is attributed to ongoing rightsizing efforts and tenants moving to, or closer to, the CBD, stimulated by the increased opportunity of space,” JLL includes.
More companies may be compelled to relocate to the CBD because of “the present absence of a substantial rent gap in between CBD and decentralised offices”, states Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rent void between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is lower the historical 50% to 60% range.
On the other hand, Tangye thinks property managers with vacant space are concentrating on increasing occupancy and stabilising profiles ahead of 2026, when leas may begin increasing once again before brand-new supply gets in the market in 2028. He includes: “By executing targeted property enhancements, including modernised entrance halls and restrooms, together with the restoration and renovation of obsolete office locations, homeowner are positioning themselves to attract costs tenants and capitalise on the awaited rental growth possibilities.”
One example is Audi Singapore, that recently moved its business from Aperia on Kallang Avenue to Resources Square in the CBD. The decision coincided with the showroom’s change from Alexandra Road to 18 Cross Street, simply a brief stroll from Capital Square, says Tangye.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, claims an increasing pattern of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many establishments in Singapore are evolving toward higher-value offerings and enhanced service models, causing a migration of some workplace need from decentralised locations to CBD premises that better fit their significantly sophisticated and client-oriented procedures,” he adds.
