Prime office market shows resilience amidst tightening supply

Core CBD Grade A vacancy fell to 4.5% as 3.08 million square feet of new space is expected from 2026 to 2028.

Prime office demand in Singapore is expected to remain resilient in 2026 despite global geopolitical tensions, according to the Singapore REITs: 2026 Q1 report by Morningstar Equity Research.

The analysis, which incorporates data from CBRE and the Urban Redevelopment Authority, noted that flight‑to‑quality leasing trends continued into late 2025, driven by banking, financial and professional services sectors.

The report projects that future office supply will be concentrated outside the Core Central Business District (CBD), with an estimated 3.08 million square feet (sq ft) of new space coming on stream between 2026 and 2028, including redevelopments such as Shaw Tower and new buildings like New Comcentre in Fringe CBD areas.

Morningstar cited CBRE data showing Core CBD Grade A vacancy tightened to 4.5% as of end‑2025, the lowest level since early 2024, and forecasted vacancy to remain within the 4% to 5% range through 2026.

Under base‑case assumptions, a recovery in occupier demand could compress vacancy further to 2.6% by 2027. Overall office rent growth in the Core CBD is forecast at around 3% for 2026.

The report also highlighted that Singapore office REITs maintained above‑market occupancy levels, reflecting sustained leasing activity across high‑quality assets.

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CBRE

Morningstar, Inc.

Urban Redevelopment Authority

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