Decentralised office rents fall as firms relocate to CBD: JLL
Andrew Tangye, head of office leasing and advisory at JLL Singapore, says an expanding trend of “strategic recentralisation” and “quality-driven moves” to workplaces in the CBD. “Many establishments in Singapore are progressing toward higher-value products and enhanced service models, causing a migration of some workplace need from decentralised areas to CBD properties that much better fit their progressively sophisticated and client-oriented procedures,” he adds.
Despite ongoing financial and geopolitical unpredictabilities, CBD office rentals edged up again in 2Q2025. Grade A gross effective rents increased 0.7% q-o-q to $11.69 psf per month, observing a fifth straight quarter of sub-1% growth, according to JLL.
The redevelopment of 79 Anson Road, that could start following year, is anticipated to worsen supply restraints better, he adds.
One instance is Audi Singapore, which recently relocated its business offices from Aperia on Kallang Avenue to Funding Square in the CBD. The relocation coincided with the display room’s change from Alexandra Road to 18 Cross Street, simply a brief walk from Capital Square, claims Tangye.
More companies may be forced to transfer to the CBD due to “the existing lack of a considerable rental fee gap in between CBD and decentralised offices”, claims Dr Chua Yang Liang, JLL’s head of study and consultancy for Southeast Asia. Currently, the average rental fee gap in between investment-grade workplaces in the CBD and the decentralised sub-market stands at around 30% to 35%, which Chua states is lesser the historical 50% to 60% tier.
At the same time, Tangye believes property managers with uninhabited room are concentrating on enhancing occupancy and stabilising portfolios ahead of 2026, when rents may begin climbing once more before brand-new supply goes into the marketplace in 2028. He adds: “By carrying out targeted property enhancements, including modernised entrance halls and restrooms, together with the remediation and remodelling of obsolete workplace locations, property owners are placing themselves to bring in costs tenants and capitalise on the awaited rental development opportunities.”
As transfers carry on to support demand, workplace leas in the CBD are expected to stay moderate, with JLL forecasting full-year development of 2% this year. Nevertheless, leas may pick up in 2025, amidst limited supply. “No huge workplace completions are anticipated for the next 12 months, with the new Shaw Tower only happening onstream in 2H2026,” notes Chua.
On the other hand, office leas in the decentralised sub-market documented a decline in 2Q2025, its very first fall in four years. Leas in the market dropped 0.8% q-o-q to $7.61 psf per month last quarter. “This decline is attributed to recurring rightsizing efforts and tenants shifting to, or closer to, the CBD, driven by the boosted opportunity of space,” JLL adds.
