Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of office leasing and advisory at JLL Singapore, states a growing pattern of “strategic recentralisation” and “quality-driven relocations” to offices in the CBD. “Many businesses in Singapore are evolving toward higher-value offerings and enhanced service models, causing a migration of some office demand from decentralised locations to CBD premises that much better fit their significantly sophisticated and client-oriented operations,” he includes.
One instance is Audi Singapore, which most recently relocated its business offices from Aperia on Kallang Avenue to Capital Square in the CBD. The move accompanied the showroom’s shift from Alexandra Road to 18 Cross Street, simply a short stroll from Capital Square, says Tangye.
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As relocations continue to sustain demand, workplace rental fees in the CBD are expected to continue to be moderate, with JLL anticipating full-year growth of 2% this year. Nevertheless, leas might pick up in 2025, amidst minimal supply. “No major office completions are expected for the following 12 months, with the brand-new Shaw Tower only entering onstream in 2H2026,” notes Chua.
Despite continuous economic and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents climbed 0.7% q-o-q to $11.69 psf monthly, observing a 5th straight quarter of sub-1% growth, according to JLL.
In contrast, office rental fees in the decentralised sub-market recorded a decline in 2Q2025, its first fall in 4 years. Rents in the market fell 0.8% q-o-q to $7.61 psf monthly last quarter. “This decrease is credited to ongoing rightsizing efforts and renters relocating to, or closer to, the CBD, driven by the boosted opportunity of space,” JLL adds.
The redevelopment of 79 Anson Road, that might start next year, is expected to intensify supply restrictions additionally, he includes.
A lot more business might be obliged to relocate to the CBD due to “the present absence of a substantial rental fee gap between CBD and decentralised offices”, states Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rental fee void between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is below the historic 50% to 60% range.
At the same time, Tangye believes property managers with uninhabited space are concentrating on enhancing occupancy and stabilising portfolios ahead of 2026, when rents might begin increasing once more before new supply gets in the marketplace in 2028. He adds: “By implementing targeted property improvements, consisting of modernised lobbies and restrooms, in addition to the remediation and restoration of outdated office locations, property owners are placing themselves to attract costs renters and capitalise on the awaited rental development possibilities.”
