CBD office rents seen rising 2% in 2026 on supply squeeze

Flight-to-quality and tight pipeline support rent growth.

Singapore’s Grade A Central Business District (CBD) office rents are forecast to rise by 2% in 2026, supported by a limited supply pipeline until 2027, according to Savills Research.

Grade A CBD office rents reached $9.96 per square foot in the fourth quarter (Q4) of 2025, marking a 0.3% quarter-on-quarter increase and the seventh consecutive quarter of growth.

Grade AAA rents rose 2.5% in 2025, exceeding the 1.6% growth in 2024 and recording the fastest annual increase since 2022.

The vacancy rate for CBD Grade A offices stood at 6.7% at end-2025, down 1.3 percentage points from the start of the year. Grade AAA vacancy declined to 6.3%, whilst Grade A vacancy fell to 4.8%. Grade AA vacancy rose 1.5 percentage points to 9.1%, the highest level since 2017, due to available space at Keppel South Central.

With occupiers continuing to move towards quality space, rents at the top end inched upwards and are expected to continue to do so throughout 2026, said Ashley Swan, executive director, commercial & industrial, Savills Singapore.

"This rental growth is likely to be supported by the lack of new office supply in 2026 (beyond Shaw Towers) and the possible re-development of older buildings even as economic uncertainty and low demand continue to linger," Swan said.

Total net take-up for 2025 reached 941,000 square feet, the highest annual level since 2019, as occupiers adopted a flight-to-quality strategy and prioritised premium buildings, Savills said.

By submarket, Marina Bay and Raffles Place recorded vacancy declines of 1.2 and 1.1 percentage points, respectively, whilst City Hall posted the strongest rental growth for the year.

The office investment market recorded its largest transaction of 2025 in Q4, with Keppel REIT’s $1.45b acquisition of a one-third interest in Marina Bay Financial Centre Tower 3, equivalent to approximately $3,268 per square foot, Savills noted.

Meanwhile, strata office investment volume fell sharply from $196.9m in Q3 2025 to $26.8m in Q4.

Singapore’s economy expanded 5.7% year-on-year in Q4 2025, supported by 15.0% growth in manufacturing, whilst the services cluster—including finance, insurance, and professional services—grew 4.2%.

The report cautioned that whilst generative artificial intelligence may pose long-term risks to office headcount, adoption in non-software industries remains gradual, limiting near-term impact on office demand.