The latest data from Savills Research reveals a notable shift in Singapore’s office market, with the Central Business District (CBD) Grade A office vacancy rate in Tanjong Pagar decreasing to 9.7% in the first quarter of 2025, down from 10.3% in the previous quarter. Conversely, City Hall experienced an increase in vacancy rates, rising by 0.3 percentage points to 3.9%.
The report highlights that whilst most micro-markets saw a decline in vacancy rates, Orchard Road remained unchanged at 1.5%. Raffles Place, Marina Bay, Shenton Way, and Beach Road/Middle Road all recorded declines ranging from 0.3 to 0.5 percentage points.
Despite the fluctuations in vacancy rates, office rents have shown resilience. The average monthly rent for CBD Grade A offices rose by 0.4% quarter-on-quarter to $9.83 per square foot. Notably, Grade AAA office rents saw a significant increase of 1.1% to $13.05 per square foot, marking the largest quarterly rise since Q2 2023.
Ashley Swan, Executive Director of Commercial & Industrial at Savills Singapore, commented on the market dynamics, stating, “After seeing an increase in leasing activity levels to begin the year, some uncertainty has crept into the market, further fuelled by the tariff announcement.”
Looking ahead, Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, noted that the lack of new supply has been crucial in maintaining rent levels. He added, “As the global trade landscape is being re-defined, this could mean that for the next two quarters, tenants are likely to sit it out and adopt a conservative approach regarding space expansion, relocation or lease renewal plans.”
Overall, the office market in Singapore remains stable, with expectations that Grade A CBD office rents will remain flat throughout 2025, despite global uncertainties.
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