The net absorption of Grade A office space in Singapore’s Central Business District (CBD) has slowed significantly in the first nine months of 2026, according to Savills Singapore. The total absorption reached 658,000 square feet, marking a 23% decrease from the 853,000 square feet recorded during the same period in 2025. This slowdown occurs even as vacancy rates continue to decline, suggesting that the limited supply of suitable office space may be constraining occupier demand.
Savills Singapore’s data reveals that the vacancy rate for CBD Grade A offices fell for the fourth consecutive quarter, dropping by 0.7 percentage points to 4.9% in Q3 2026. This is the lowest vacancy rate since Q1 2020. Despite the moderate leasing activity, average rents for CBD Grade A offices rose for the 10th consecutive quarter, increasing by 1.4% to a record high of S$10.56 per square foot.
The decline in vacancy rates was observed across all office sub-grades, with Grade AAA offices experiencing the most significant drop, from 3.1% in Q2 2026 to 2.2% in Q3 2026. This reflects the continued absorption of available space within premium office developments, particularly newer buildings that have attracted occupier demand.
Executive Director of Research & Consultancy at Savills Singapore, Alan Cheong, noted that the rise in office rents is primarily driven by limited supply rather than increased demand. He stated, “With vacancy rates below their long-term average and limited new supply expected in 2027, we expect rents to rise by around 5% this year and a further 5% to 7% in 2027.”
As new Grade A CBD office completions are expected to be lower in 2027, occupiers seeking expansion or relocation opportunities may continue to face a shortage of quality space, particularly in prime CBD micro-markets.
