Decentralised office rents fall as firms relocate to CBD: JLL
In contrast, workplace rental fees in the decentralised sub-market recorded a downturn in 2Q2025, its very first fall in 4 years. Leas in the market fell 0.8% q-o-q to $7.61 psf per month last quarter. “This decline is attributed to ongoing rightsizing efforts and occupants moving to, or closer to, the CBD, motivated by the enhanced availability of space,” JLL adds.
More business might be obliged to transfer to the CBD due to “the existing absence of a substantial rental fee gap between CBD and decentralised workplaces”, claims Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average rental fee gap in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is below the historical 50% to 60% range.
As relocations continue to support demand, office leas in the CBD are expected to stay moderate, with JLL anticipating full-year development of 2% this year. However, rents may pick up in 2025, amidst restricted supply. “No major workplace conclusions are anticipated for the following 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
Meanwhile, Tangye thinks property managers with vacant area are concentrating on increasing occupancy and stabilising profiles ahead of 2026, when rents might start rising once again before new supply gets in the market in 2028. He adds: “By implementing targeted property improvements, consisting of modernised lobbies and bathrooms, in addition to the repair and restoration of outdated workplace areas, property owners are positioning themselves to attract premium occupants and capitalise on the awaited rental growth opportunities.”
Regardless of recurring financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents rose 0.7% q-o-q to $11.69 psf per month, observing a fifth straight quarter of sub-1% growth, according to JLL.
One example is Audi Singapore, that recently relocated its business offices from Aperia on Kallang Avenue to Capital Square in the CBD. The decision coincided with the showroom’s shift from Alexandra Road to 18 Cross Street, simply a brief walk from Capital Square, claims Tangye.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, states an increasing trend of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. “Many establishments in Singapore are progressing towards higher-value products and improved service models, causing a movement of some office demand from decentralised places to CBD premises that far better accommodate their increasingly sophisticated and client-oriented operations,” he includes.
The redevelopment of 79 Anson Road, which could begin following year, is expected to worsen supply restraints better, he includes.
