Singapore CBD Grade A office rents rise for fourth straight quarter in Q1

Rents increased by 0.4% QoQ.

Data compiled by Savills Research showed that the vacancy rate of CBD Grade A offices in all micro-markets recorded declines in vacancy rates, except for City Hall and Orchard Road. Tanjong Pagar saw the largest contraction in the first quarter, falling to 9.7% in Q1/2025 from 10.3% in Q4/2024.

City Hall saw vacancy rates rising 0.3 of a percentage point (ppt) to 3.9%, while there was no change at 1.5% for Orchard Road. The vacancy rates in Raffles Place, Marina Bay, Shenton Way and Beach Road/Middle Road recorded declines of between 0.3 of a ppt to 0.5 of a ppt in the quarter.

Here’s more from Savills:

With healthy occupancy levels of CBD Grade A office buildings, rents have remained firm. Average monthly rents of overall CBD Grade A offices in Savills basket rose for the fourth consecutive quarter by 0.4% quarter-on-quarter (QoQ) to $9.83 psf in Q1/2025. This was slightly lower compared to 0.6% last quarter.

While the growth momentum has slowed down for Grades A and AA buildings in the quarter, rents of Grade AAA buildings rose by a larger 1.1% QoQ to S$13.05 psf, against 0.7% in Q4/2024. This was the largest QoQ increase since Q2/2023 when rents rose by a similar magnitude.

Rents of Grade AAA buildings has been on the rise for four consecutive quarters, evident from the high occupancies of such buildings and the quick pace in which previously vacated spaces are being filled up. These factors have motivated landlords to maintain or even increase their asking rents.

On a year-on-year (YoY) basis, rents of Grade AAA office buildings saw the largest growth, with a surge of 2.7%, the highest YoY increase in a quarter since Q3/2023. Similarly, rents of Grade AA and A buildings rose 1.7% and 0.9% YoY respectively in the quarter.

On a quarterly basis, rents in CBD Grade A offices in Beach Road/Middle Road, Orchard Road and Shenton Way remained unchanged in Q1/2025. For Orchard Road, this was the fifth consecutive quarter that rents have remained constant. The remaining micro-markets registered QoQ growth between 0.3% and 1.4%, with the largest growth of 1.4% QoQ increase in Marina Bay, the highest since Q4/2019. This could be attributed to most of the Grade AAA buildings being in Marina Bay, where the tight occupancies have brought about the strong growth to the micro-market.

Ashley Swan, Executive Director, Commercial & Industrial, Savills Singapore says, “After seeing an increase in leasing activity levels to begin the year, some uncertainty has crept into the market, further fuelled by the tariff announcement. Companies here continue to evaluate their operations and space requirements as their business plans evolve further in light of the changing economic landscape which will inevitably affect demand in some way.

Much like the previous year, rents and occupancy continue to remain fairly stable as supply constraints negate declining demand. For now, we expect this trend to continue for now as the market drivers remain unchanged and the impact of global uncertainty plays out over the next few quarters.”

Alan Cheong, Executive Director, Research & Consultancy at Savills Singapore adds, “Our previous briefings mentioned that the relative lack of new supply had been key in keeping rents rising. However, as we enter the second quarter of the year, whether office rents can remain resilient against the uncertainties brought on by the US tariffs is the question. We believe that it may still be able to hold up.

As the global trade landscape is being re-defined, this could mean that for the next two quarters, tenants are likely to sit it out and adopt a conservative approach regarding space expansion, relocation or lease renewal plans . With the flux arising from the tariff negotiations in mind, we maintain our forecast for the overall Grade A CBD office rents and expect them to remain flat in 2025. As vacancy levels amongst most of the premium AAA-grade buildings are very low, they may still be able to eke out a 2% YoY increase.”