Singapore’s Grade A Central Business District (CBD) office market is experiencing a surge in rental prices, driven primarily by constrained supply rather than increased demand, according to Savills’ Q3 2026 report. The vacancy rate for these prime offices has dropped for the fourth consecutive quarter, reaching 4.9%—the lowest since Q1 2020. This decline in vacancy has bolstered landlords’ confidence, leading to a 1.4% quarter-on-quarter increase in average rents, now at a record S$10.56 per square foot.
The report highlights that the limited availability of office space is the main factor behind the rental growth, despite moderate leasing activity. Savills notes that the bullish outlook for the Grade A CBD office market could be tempered by potential risks, such as a rapid unwinding of AI investments or a spike in downstream petroleum product prices. However, if these risks do not materialise, the current supply-demand imbalance is expected to persist, with rents projected to rise by 5% in 2026 and between 5% and 7% in 2027.
The ongoing trend of rising rents underscores the challenges faced by occupiers in securing space within Singapore’s CBD, as landlords continue to leverage the low vacancy rates to their advantage.
