Singapore’s office market experienced a mixed start to 2025, with demand remaining subdued as tenants faced budget constraints, according to Savills Singapore’s latest report. Despite this, the average monthly rents for CBD Grade A offices rose by 0.4% quarter-on-quarter to S$9.83 per square foot, marking the fourth consecutive quarter of rental growth.
The report highlights that the vacancy rate for CBD Grade A offices improved slightly by 0.3 percentage points to 7.7%, reversing a trend of rising vacancies over the previous three quarters. This improvement was echoed across offices of all grades, suggesting a stabilisation in the market.
Investment activity in the office sector was notably low, with only one block transaction completed in the first quarter. Although the value of strata transactions was higher, it was insufficient to significantly impact overall investment figures. Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, noted, “Although multinational tenants are likely to adopt a conservative approach in an uncertain world, premium grade offices with very low vacancies may still see rental growth.”
Looking ahead, Savills maintains a cautious outlook for the remainder of 2025, forecasting that overall Grade A CBD office rents will remain flat. However, premium AAA-grade buildings, with their low vacancy levels, may achieve a modest 2% year-on-year increase.
The report underscores the resilience of Singapore’s office market amidst global uncertainties, with landlords holding firm on rents due to high occupancy levels. As trade negotiations with the US are in early stages, the fluidity of tariffs remains a factor to watch.
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