Singapore office vacancy tightens to 5.3% in Q2 | Real Estate Asia

Singapore office vacancy tightens to 5.3% in Q2

Thanks to the significant demand for quality office spaces.

According to a Colliers report, core CBD Premium and Grade A office rents rose by 0.3% during Q2 2025, reaching SGD 11.71 per sq ft. This growth was largely driven by leasing activity in premium buildings, where tenants continue to prioritise well-located, high-specification offices.

“While most occupiers still favour renewals over relocations, there is a growing trend of flight to quality—with some firms relocating to newer, more efficient spaces to enhance the employee experience and optimise space usage,” the report said.

Here’s more from Colliers:

Landlords are responding to evolving tenant needs by offering smaller spaces and incentives to bridge rental expectations. These strategies have proven to be effective in driving momentum for take up in new developments such as IOI Central Boulevard that is near full occupancy.

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The tightening vacancy rate in the Core CBD Premium and Grade A segment— from 7.6% to 5.3% reflects healthy demand, particularly for quality spaces. This trend is reinforced by the backfilling of surrendered units, especially those with existing fit-outs, which offer cost and time savings for incoming tenants.

Looking ahead, the limited pipeline of new supply until 2027 is expected to place further upward pressure on rents. This is supported by a more conducive investment environment amidst easing interest rates.

Additionally, the five-year extension on the CBD incentive (CBDI) and Strategic Development Incentive (SDI) schemes—now expanded to include the Cecil and Anson Road areas, may trigger the withdrawal of more office supply for redevelopment into mixed-use projects.

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