Decentralised office rents fall as firms relocate to CBD: JLL
Despite ongoing financial and geopolitical unpredictabilities, 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, noting a 5th straight quarter of sub-1% growth, according to JLL.
On the other hand, Tangye believes property managers with uninhabited room are focusing on enhancing occupancy and stabilising portfolios ahead of 2026, when rental fees might begin climbing once again prior to brand-new supply goes into the marketplace in 2028. He adds: “By executing targeted property enhancements, including modernised entrance halls and bathrooms, in addition to the restoration and renovation of obsolete office locations, property owners are positioning themselves to attract costs renters and capitalise on the expected rental development opportunities.”
As transfers continue to support demand, workplace rental fees in the CBD are anticipated to remain modest, with JLL forecasting full-year growth of 2% this year. Nevertheless, leas might pick up in 2025, in the middle of limited supply. “No significant office completions are expected for the next 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
A lot more companies may be forced to transfer to the CBD as a result of “the existing lack of a significant rental fee space between CBD and decentralised workplaces”, claims Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average lease void between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua states is lower the historic 50% to 60% rank.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says a growing pattern of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many services in Singapore are progressing toward higher-value offerings and improved service models, causing a movement of some workplace demand from decentralised locations to CBD facilities that far better fit their significantly sophisticated and client-oriented procedures,” he includes.
On the other hand, workplace leas in the decentralised sub-market documented a downturn in 2Q2025, its first fall in 4 years. Rents in the market slipped 0.8% q-o-q to $7.61 psf per month last quarter. “This decline is attributed to continuous rightsizing efforts and tenants moving to, or closer to, the CBD, driven by the increased opportunity of space,” JLL includes.
One example is Audi Singapore, that most recently transferred its business offices from Aperia on Kallang Avenue to Funding 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.
The redevelopment of 79 Anson Road, which could start next year, is expected to compound supply restrictions better, he includes.
