Southeast Asian office leasing demand to be dominated by small to mid-size spaces

This is linked with flight-to-quality moves in the second half of 2025.

According to a Knight Frank report, with most markets passing the peak in the development cycle, vacancies tightened across Southeast Asia’s emerging markets.

Rents in Jakarta rose the fastest, up 6.9% quarter-on-quarter as the reduction in new supply fostered a more balanced market which lifted rentals in the capital for a second consecutive quarter.

Here’s more from Knight Frank:

Those in Bangkok also rose as prime-grade buildings entering the market charged a premium. Those in Kuala Lumpur remained relatively unchanged despite elevated vacancies, due to higher rents, particularly in transit-linked and/or Grade A buildings within integrated developments.

However, prime vacancy rate spiked in Ho Chi Minh City, which hit close to 20% during the quarter, due to the completion of over 69,000 sqm of new office space. Singapore’s prime office market remained largely stable. Most occupiers continued to prefer renewals to avoid raising CAPEX where possible.

As such, leasing activity will mostly be made up of small and mid-size spaces in flight-to-quality moves in the latter part of 2025.