Decentralised office rents fall as firms relocate to CBD: JLL
A lot more companies may be urged to relocate to the CBD because of “the current absence of a substantial rental fee space between CBD and decentralised offices”, says Dr Chua Yang Liang, JLL’s head of research study and consultancy for Southeast Asia. Currently, the average rent space in 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% tier.
On the other hand, workplace rents in the decentralised sub-market recorded a decline in 2Q2025, its very first fall in four years. Rental fees in the market fell 0.8% q-o-q to $7.61 psf per month last quarter. “This decrease is attributed to continuous rightsizing efforts and renters shifting to, or closer to, the CBD, driven by the increased opportunity of space,” JLL includes.
One instance is Audi Singapore, which just recently transferred its business from Aperia on Kallang Avenue to Funding Square in the CBD. The relocation accompanied the display room’s shift from Alexandra Road to 18 Cross Street, just a brief stroll from Capital Square, states Tangye.
As relocations carry on to sustain demand, office leas in the CBD are expected to stay modest, with JLL predicting full-year growth of 2% this year. Nevertheless, rental fees might pick up in 2025, in the middle of minimal supply. “No major office completions are anticipated for the following 12 months, with the new Shaw Tower only coming onstream in 2H2026,” notes Chua.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says a growing pattern of “strategic recentralisation” and “quality-driven moves” to offices in the CBD. “Many establishments in Singapore are progressing towards higher-value products and improved company models, causing a migration of some office need from decentralised locations to CBD premises that much better fit their increasingly sophisticated and client-oriented procedures,” he includes.
Regardless of continuous economic and geopolitical uncertainties, CBD office rents edged up again in 2Q2025. Grade A gross effective rental fees climbed 0.7% q-o-q to $11.69 psf each month, observing a 5th straight quarter of sub-1% growth, according to JLL.
The redevelopment of 79 Anson Road, which might begin next year, is anticipated to compound supply restrictions better, he adds.
On the other hand, Tangye believes proprietors with vacant room are focusing on improving occupancy and stabilising portfolios ahead of 2026, when rental fees may start rising again prior to brand-new supply gets in the marketplace in 2028. He includes: “By carrying out targeted property improvements, consisting of modernised lobbies and washrooms, along with the repair and improvement of out-of-date workplace locations, property owners are placing themselves to attract costs tenants and capitalise on the anticipated rental growth possibilities.”
