Decentralised office rents fall as firms relocate to CBD: JLL
As relocations carry on to support need, workplace rental fees in the CBD are expected to continue to be modest, with JLL forecasting full-year growth of 2% this year. However, rental fees might pick up in 2025, in the middle of minimal supply. “No major office conclusions are expected for the next 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
At the same time, Tangye thinks property managers with vacant area are focusing on improving occupancy and stabilising profiles ahead of 2026, when rental fees may begin rising again before new supply enters the market in 2028. He adds: “By carrying out targeted property enhancements, consisting of modernised lobbies and washrooms, along with the reconstruction and improvement of outdated workplace locations, homeowner are placing themselves to draw in premium occupants and capitalise on the awaited rental growth possibilities.”
Despite ongoing financial and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective rental fees increased 0.7% q-o-q to $11.69 psf per month, marking a fifth straight quarter of sub-1% growth, according to JLL.
The redevelopment of 79 Anson Road, that might start next year, is expected to compound supply constraints better, he includes.
Newport Residences condominium
On the other hand, workplace leas in the decentralised sub-market reported a downturn in 2Q2025, its first fall in four years. Rents in the market dropped 0.8% q-o-q to $7.61 psf each month last quarter. “This decline is credited to recurring rightsizing efforts and renters relocating to, or closer to, the CBD, stimulated by the boosted opportunity of space,” JLL adds.
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says a growing pattern of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many businesses in Singapore are progressing towards higher-value services and improved service models, causing a migration of some workplace demand from decentralised areas to CBD properties that far better suit their significantly sophisticated and client-oriented procedures,” he adds.
One example is Audi Singapore, which recently relocated its offices from Aperia on Kallang Avenue to Resources Square in the CBD. The relocation accompanied the showroom’s change from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, states Tangye.
More companies might be obliged to move to the CBD as a result of “the existing absence of a significant rent gap in between CBD and decentralised workplaces”, claims Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rental fee space in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua states is below the historical 50% to 60% tier.
