Office demand outpaces new CBD supply: reports

Only Shaw Tower is scheduled for major Grade A office completion in the CBD next year.

Rents in Grade A offices are expected to accelerate in fiscal year (FY) 2026, with only one major project set for completion within the central business district (CBD) this coming year.

“Based on our estimates, an average of just c.630,000 sq.ft. [square feet] of new office space (or c.0.8% of total stock) will be added annually to the downtown area over the next three years. Notably, the majority of upcoming projects are not expected to be delivered until FY 2028,” DBS said in its latest industry report.

The company said that Shaw Tower is the only major project scheduled for completion within the CBD next year.

Supply conditions will be even more constrained in the near term, with only 310,000 sq.ft. of new space projected to be completed annually between FY 2026 and FY 2027.

Cushman & Wakefield has said that it is also seeing CBD Grade A office rents to grow between 4% and 7% in 2026, compared with 2% to 3% in 2025.

New supply will be limited to 0.4 million square feet (msf) in 2026 and 0.2 msf in 2027, against historical net demand of about 0.9 msf annually, according to its report.

The financial services sector is expected to continue driving demand for CBD office demand, as employment in the sector is seen to further increase in the coming year.

“The sector’s continued expansion, supported by a growing presence of global financial institutions and a steady increase in family offices establishing operations in Singapore, will underpin ongoing space requirements,” DBS said.

The company noted that demand for office space in the CBD has been closely linked to employment trends in key sectors, such as financial and insurance services, information and communications, as well as real estate and professional services. Employment in these industries has generally expanded over the past few years, reinforcing the sustained need for quality office space.

ManpowerGroup also said in its Employment Outlook Survey that finance and insurance employers in the city-state reported a higher net employment outlook for the first quarter of 2026 at 33%, rising 23% from the same period last year.

“Although the information and communications and real estate and professional services sectors have recently seen a contraction in employment, the financial and insurance services sector has helped offset this weakness, recording strong job growth, including a notable increase of c.10,300 jobs in the first three quarters of FY 2025,” DBS said.