Decentralised office rents fall as firms relocate to CBD: JLL
Regardless of continuous financial and geopolitical uncertainties, CBD office rentals edged up again in 2Q2025. Grade A gross effective leas rose 0.7% q-o-q to $11.69 psf monthly, marking a 5th straight quarter of sub-1% growth, according to JLL.
A lot more business may be compelled to transfer to the CBD because of “the present absence of a substantial rental fee gap between CBD and decentralised offices”, claims Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average lease space in between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua claims is lesser the historical 50% to 60% tier.
As transfers proceed to support need, workplace rental fees in the CBD are expected to stay moderate, with JLL predicting full-year development of 2% this year. However, rental fees might pick up in 2025, in the middle of restricted supply. “No huge office conclusions are anticipated for the following 12 months, with the new Shaw Tower only entering onstream in 2H2026,” notes Chua.
On the other hand, office rents in the decentralised sub-market recorded a decline in 2Q2025, its first fall in four years. Leas in the market fell 0.8% q-o-q to $7.61 psf per month last quarter. “This decrease is credited to continuous rightsizing efforts and renters shifting to, or closer to, the CBD, motivated by the boosted opportunity of space,” JLL includes.
Meanwhile, Tangye thinks proprietors with uninhabited area are focusing on improving occupancy and stabilising profiles ahead of 2026, when leas might start climbing once again prior to new supply enters the marketplace in 2028. He includes: “By applying targeted property improvements, including modernised entrance halls and restrooms, along with the reconstruction and restoration of outdated workplace locations, homeowner are placing themselves to draw in costs occupants and capitalise on the expected rental development opportunities.”
Andrew Tangye, head of office leasing and advisory at JLL Singapore, states a growing pattern of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. “Many businesses in Singapore are progressing towards higher-value services and improved service models, causing a migration of some office need from decentralised locations to CBD premises that far better suit their progressively sophisticated and client-oriented procedures,” he includes.
The redevelopment of 79 Anson Road, that can commence following year, is anticipated to worsen supply restrictions further, he includes.
One example is Audi Singapore, which most recently moved its offices from Aperia on Kallang Avenue to Resources Square in the CBD. The shift accompanied the showroom’s shift from Alexandra Road to 18 Cross Street, just a short stroll from Capital Square, claims Tangye.
