Decentralised office rents fall as firms relocate to CBD: JLL
More business might be forced to relocate to the CBD because of “the current lack of a considerable lease gap between CBD and decentralised workplaces”, states Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia. Currently, the average rent space between investment-grade offices in the CBD and the decentralised sub-market stands at around 30% to 35%, that Chua states is lower the historic 50% to 60% range.
One instance is Audi Singapore, that recently relocated its business offices from Aperia on Kallang Avenue to Funding Square in the CBD. The shift coincided with the display room’s change from Alexandra Road to 18 Cross Street, just a brief stroll from Capital Square, claims Tangye.
At the same time, Tangye believes proprietors with vacant area are focusing on increasing occupancy and securing profiles ahead of 2026, when rents may start increasing once more prior to new supply gets in the market in 2028. He includes: “By applying targeted property improvements, consisting of modernised lobbies and restrooms, along with the remediation and renovation of out-of-date office locations, homeowner are placing themselves to draw in premium renters and capitalise on the awaited rental development opportunities.”
As transfers proceed to sustain need, office leas in the CBD are anticipated to remain small, with JLL anticipating full-year development of 2% this year. However, rents may pick up in 2025, amid minimal supply. “No huge office conclusions are anticipated for the next 12 months, with the brand-new Shaw Tower only entering onstream in 2H2026,” notes Chua.
On the other hand, office rental fees in the decentralised sub-market documented a downtrend in 2Q2025, its very first fall in 4 years. Leas in the market dropped 0.8% q-o-q to $7.61 psf each month last quarter. “This decline is attributed to recurring rightsizing efforts and occupants moving to, or closer to, the CBD, driven by the boosted availability of space,” JLL adds.
The redevelopment of 79 Anson Road, that could begin next year, is expected to compound supply constraints even more, he adds.
In spite of recurring financial and geopolitical unpredictabilities, CBD office rents edged up again in 2Q2025. Grade A gross effective rental fees climbed 0.7% q-o-q to $11.69 psf monthly, observing a fifth straight quarter of sub-1% growth, according to JLL.
Andrew Tangye, head of workplace leasing and advisory at JLL Singapore, says an expanding trend of “strategic recentralisation” and “quality-driven relocations” to workplaces in the CBD. “Many establishments in Singapore are evolving toward higher-value products and improved company models, causing a movement of some workplace need from decentralised areas to CBD facilities that far better accommodate their significantly sophisticated and client-oriented procedures,” he includes.
