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Singapore office market shows resilience amid global uncertainties

Newsflash Asia

- July 2, 2025

The Singapore office market has demonstrated resilience in Q2 2025, marking the second consecutive quarter of rental growth despite global economic uncertainties. According to CBRE Research, gross effective rents for Core CBD (Grade A) offices increased by 0.4% quarter-on-quarter, reaching $12.10 per square foot per month. This growth is attributed to a continued “flight to quality,” with occupiers favouring premium office spaces.

Vacancy rates in the Core CBD (Grade A) decreased from 5.9% in Q1 2025 to 5.3% in Q2 2025. Tricia Song, CBRE Head of Research, Southeast Asia, noted that the IOI Central Boulevard Towers played a significant role in absorbing market overhang, achieving an occupancy rate of approximately 85% by Q2 2025.

David McKellar, CBRE Head of Office Services, Singapore, highlighted the diverse mix of tenants attracted to the Core CBD, including firms from the insurance, asset management, and pharmaceutical sectors. He noted, “Prime office spaces in the secondary market, particularly those in central locations, have been swiftly taken up.”

In the decentralised office market, rentals remained stable despite a rise in vacancy rates from 6.2% in Q1 to over 7% in Q2 2025, driven by new supply from projects like Labrador Tower and Paya Lebar Green. Advanced negotiations are underway for remaining spaces at Paya Lebar Green.

The office investment market saw a 35.3% quarter-on-quarter slowdown in transactions to $207.07m. Michael Tay, CBRE Singapore Advisory Deputy Managing Director, stated that Singapore’s status as a safe haven continues to attract investor interest.

Looking ahead, CBRE Research has upgraded its rental forecast, projecting rental growth for 2025 to reach the upper end of the 2–3% range, supported by reduced new supply and strong market fundamentals.
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This story was selected and published by a human editor, with content adapted from original press material using AI tools. Spot an error? Report it here.

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