Decentralised office rents fall as firms relocate to CBD: JLL
More companies may be forced to relocate to the CBD as a result of “the present lack of a considerable 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 rent gap between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is lesser the historic 50% to 60% tier.
As relocations continue to sustain demand, office leas in the CBD are expected to stay small, with JLL forecasting full-year growth of 2% this year. However, leas might pick up in 2025, in the middle of minimal supply. “No huge workplace completions are expected for the next 12 months, with the new Shaw Tower only coming onstream in 2H2026,” notes Chua.
Despite recurring economic and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective rental fees 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 thinks property owners with vacant space are concentrating on enhancing occupancy and securing profiles ahead of 2026, when rents might start rising once more before new supply enters the market in 2028. He adds: “By executing targeted property enhancements, consisting of modernised entrance halls and restrooms, in addition to the remediation and restoration of out-of-date workplace locations, property owners are positioning themselves to bring in costs lessees and capitalise on the anticipated rental growth opportunities.”
On the other hand, workplace rental fees in the decentralised sub-market recorded a downtrend in 2Q2025, its very first fall in four years. Rental fees in the market slipped 0.8% q-o-q to $7.61 psf monthly last quarter. “This decrease is attributed to recurring rightsizing efforts and occupants shifting to, or closer to, the CBD, driven by the increased availability of space,” JLL adds.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says a growing trend of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many establishments in Singapore are progressing toward higher-value offerings and improved company models, causing a movement of some workplace demand from decentralised locations to CBD premises that much better accommodate their significantly sophisticated and client-oriented operations,” he includes.
The redevelopment of 79 Anson Road, which might commence following year, is anticipated to worsen supply constraints even more, he includes.
One instance is Audi Singapore, which most recently moved its office spaces from Aperia on Kallang Avenue to Resources Square in the CBD. The shift accompanied the display room’s shift from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, says Tangye.
