Singapore’s office rental market has shown signs of recovery in Q1 2025, with the URA office rental index for the Central Region rising by 0.3% quarter-on-quarter. This follows consecutive declines in the latter half of 2024.
According to CBRE Research, the Core CBD (Grade A) submarket experienced a 0.8% increase in rents, reaching $12.05 per square foot per month. This growth is attributed to a strong demand for premium office spaces, particularly from sectors like private wealth and asset management.
The absorption of more space in IOI Central Boulevard Towers, which now boasts an occupancy rate exceeding 80%, has contributed to this positive trend. However, the islandwide vacancy rate increased to 11.7% in Q1 2025, up from 10.6% in Q4 2024, due to new completions such as Keppel South Central and Paya Lebar Green.
Retail spaces in the Central Region saw a 0.5% decline in rents, reversing the previous quarter’s gains. The retail market remains two-tiered, with prime spaces in demand whilst secondary locations face softer leasing interest. Despite this, prime floor rents increased by 0.6% quarter-on-quarter.
In the residential sector, private housing prices rose by 0.8% in Q1 2025, driven by non-landed properties. The RCR segment led the growth with a 1.7% increase. Primary sales remained robust, with 3,375 new private homes sold, although secondary sales slowed.
Looking ahead, CBRE Research anticipates continued rental growth in the Core CBD (Grade A) office market, supported by limited new supply and interest rate cuts. The retail sector may face challenges from e-commerce and rising costs, but tourism recovery could bolster demand for prime retail spaces.
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