Singapore office demand softens

Previously leading office expansions, tech firms and banks are now scaling back.

Near-term requirements for deskspace in Singapore remain limited as demand from the tech and banking sectors stay subdued, according to CBRE.

CBRE said there are still some bright spots in the office leasing market with the potential rebound of the tech industry, a sector that has been driving demand for more workspace recently before its downturn.

It said early signs of recovery include declining shadow space returned by tech firms as some are choosing to keep them for their own use, and the expansion plans announced by some Chinese tech companies.

The property agency, in its latest APAC Office Trends report, also noted that the volume of requests for proposals (RFPs) from occupiers has increased as companies across industries adapt to the changing demands in the workplace. Several negotiations are also ongoing for the new office projects that are set to become operational either this year or next year.

Despite these improvements, CBRE said pre-leasing activity remains slow in part due to the continued rightsizing of the banking sector, with banks seen trying to maximise office space by returning excess workspace or moving to smaller offices.

“Occupiers are recommended to upcoming new supply due in 2027 to 2028, as pipeline is expected to taper off after the spike in completions this year,” CBRE said.

“For projects completing in 2024-2025, landlords should focus on raising and maintaining occupancy by softening their stance on achieving market leading rents. Maintenance and upgrades to sustainability rations will also be key,” it added.

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