In the third quarter of 2025, Singapore’s office market experienced a notable trend of flight-to-quality moves, as reported by Knight Frank Singapore. With limited new office supply, occupiers are focusing on renewing leases and selectively upgrading to newer, well-connected buildings. This has resulted in a two-tier market where modern buildings thrive, whilst older properties face increasing vacancy pressures.
Prime office rents in the Raffles Place and Marina Bay precincts rose by 0.3% quarter-on-quarter, reaching an average of S$11.41 per square foot per month. Occupancy levels in these areas remained stable at 94.7%, with overall Central Business District (CBD) occupancy increasing by 0.5 percentage points to 94.2%. Calvin Yeo, Head of Occupier Strategy and Solutions at Knight Frank Singapore, noted, “With limited fresh supply in the pipeline, most occupiers continue to prioritise renewals.”
The demand for quality office spaces is driven by the enhanced tenant experience, often referred to as “hotelification,” which includes concierge services and smart building operations. Notable relocations include Zoom Communications and Jane Street moving to IOI Central Boulevard Towers. Meanwhile, older buildings are becoming less attractive to modern businesses, especially with upcoming projects like the Comcentre redevelopment offering AI-enabled, carbon-neutral offices.
The Singapore economy’s growth, with a 4.4% year-on-year increase in Q2 2025, has led the Ministry of Trade and Industry to revise the GDP growth forecast to 1.5% to 2.5% for the year. Despite global uncertainties, Singapore remains a stable business hub, with prime rental growth expected to remain flat in the coming months.
