Decentralised office rents fall as firms relocate to CBD: JLL
Regardless of continuous economic 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 transferred its office spaces from Aperia on Kallang Avenue to Resources Square in the CBD. The relocation accompanied the display room’s change from Alexandra Road to 18 Cross Street, simply a short walk from Capital Square, states Tangye.
On the other hand, Tangye believes property owners with vacant room are focusing on improving occupancy and securing portfolios ahead of 2026, when leas may begin climbing once again before new supply gets in the market in 2028. He includes: “By executing targeted property improvements, consisting of modernised entrance halls and restrooms, together with the repair and improvement of outdated office locations, property owners are placing themselves to attract premium occupants and capitalise on the expected rental development opportunities.”
On the other hand, workplace rental fees in the decentralised sub-market reported a downtrend in 2Q2025, its very first fall in 4 years. Rental fees in the market dropped 0.8% q-o-q to $7.61 psf per month last quarter. “This decline is credited to recurring rightsizing efforts and occupants shifting to, or closer to, the CBD, driven by the enhanced opportunity of space,” JLL includes.
The redevelopment of 79 Anson Road, that can begin next year, is anticipated to worsen supply restraints better, he adds.
A lot more business might be forced to move to the CBD because of “the existing lack of a considerable rent gap between CBD and decentralised offices”, states Dr Chua Yang Liang, JLL’s head of research 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%, that Chua claims is lower the historical 50% to 60% rank.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says a growing trend of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. “Many establishments in Singapore are evolving toward higher-value products and improved company models, causing a movement of some workplace demand from decentralised locations to CBD premises that better accommodate their increasingly sophisticated and client-oriented procedures,” he includes.
As transfers proceed to support demand, workplace rents in the CBD are anticipated to stay small, with JLL anticipating full-year growth of 2% this year. Nevertheless, rents might pick up in 2025, amidst restricted supply. “No significant office conclusions are anticipated for the following 12 months, with the new Shaw Tower only coming onstream in 2H2026,” notes Chua.
