Decentralised office rents fall as firms relocate to CBD: JLL
In spite of recurring financial and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective leas increased 0.7% q-o-q to $11.69 psf per month, marking a fifth straight quarter of sub-1% growth, according to JLL.
One example is Audi Singapore, that recently relocated its business from Aperia on Kallang Avenue to Resources Square in the CBD. The move coincided with the showroom’s shift from Alexandra Road to 18 Cross Street, just a short walk from Capital Square, states Tangye.
On the other hand, workplace rental fees in the decentralised sub-market reported a decline in 2Q2025, its very first fall in 4 years. Rental fees in the market fell 0.8% q-o-q to $7.61 psf each month last quarter. “This decrease is credited to ongoing rightsizing efforts and renters moving to, or closer to, the CBD, stimulated by the enhanced opportunity of space,” JLL adds.
The redevelopment of 79 Anson Road, that could begin following year, is expected to worsen supply restraints further, he includes.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says a growing pattern of “strategic recentralisation” and “quality-driven moves” to workplaces in the CBD. “Many businesses in Singapore are evolving toward higher-value offerings and enhanced service models, causing a migration of some office need from decentralised locations to CBD facilities that far better fit their significantly sophisticated and client-oriented operations,” he includes.
Zyon Grand CDL and Mitsui Fudosan
As transfers carry on to support demand, workplace leas in the CBD are anticipated to continue to be small, with JLL predicting full-year growth of 2% this year. However, rents may pick up in 2025, amidst restricted supply. “No major office completions are anticipated for the following 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
More companies might be forced to move to the CBD due to “the existing absence of a substantial rent gap in between CBD and decentralised workplaces”, says Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rent space in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua claims is lesser the historical 50% to 60% tier.
On the other hand, Tangye thinks property managers with uninhabited area are concentrating on enhancing occupancy and securing profiles ahead of 2026, when rents may begin rising once again before brand-new supply goes into the marketplace in 2028. He adds: “By carrying out targeted property enhancements, including modernised entrance halls and bathrooms, together with the restoration and restoration of obsolete office locations, homeowner are positioning themselves to bring in costs renters and capitalise on the expected rental development chances.”
