Office rents rise 0.4% in Q4 as CBD occupancy nears capacity

Sector sees strong absorption, CBD shadow space declines.

Singapore’s Central Region office rental index rose 0.4% in the fourth quarter of 2025, with full-year rental growth reaching 0.3%, driven by contract renewals, according to an ETC report.

Island-wide occupancy reached 95.1%, the highest level since the first quarter of 2024, whilst central business district (CBD) occupancy rose to 94.3%, with net absorption of 195,000 sq ft.

Shadow space in the CBD decreased by 66,000 sq ft of net lettable area (NLA), whilst total island-wide shadow space reached 432,000 sq ft NLA.

The office sector accounted for 37% of all property investment sales during the quarter, the report said.

Hongkong Land transferred $3.9b in CBD assets to the Singapore Central Private Real Estate Fund, whilst Keppel REIT paid $937.5m for a one-third stake in Marina Bay Financial Centre Tower 3.

The supply pipeline from 2026 through 2030 contains 5.9 million sq ft NLA. Upcoming projects include Newport Tower in 2027 and the 701,000 sq ft Skywaters development in 2028.

The report noted that CBD Grade A office rents are expected to increase 3% to 4% in 2026, with supply constraints shifting pricing power to landlords. Forecasts indicate interest rates will trough in 2026, a condition that supports investment sales.

Shaw Tower is the sole major completion scheduled for the year.