Cautious sentiment and slower leasing to continue in office market

Capital values were stable in the third quarter.

The office market is seen to continue experiencing cautious sentiment and slower leasing activity, suggesting demand will remain subdued in the near term.

“Landlords should adopt proactive strategies such as offering flexible spaces, enhanced amenities, and speculative fit-outs to retain tenants and capture interest,” said Bastiaan van Beijsterveldt, managing director, Singapore at Colliers.

According to its new analysis, Colliers said Singapore’s office market saw stable capital values and sustained rental growth in the third quarter of 2025, “reinforcing Singapore’s position as a preferred destination for investors seeking steady yields and long-term stability.”

Meanwhile, tenant enquiries and inspection activity slowed during the quarter compared to the first half of 2025. This shows a more cautious approach amidst persistent macroeconomic uncertainties and the absence of strong growth drivers, Colliers said.

Occupiers without imminent lease expiries also preferred adopting a wait-and-see stance, whilst those with upcoming expiries have started their review processes earlier.

Colliers expects demand to taper towards the end of the year as companies consolidate their footprints following restructuring efforts amidst macroeconomic uncertainties. Upcoming large lease expiries, meanwhile, are expected to inject some activity into the market in the long term.

“Singapore’s stability and proactive government initiatives to strengthen its position as a hub for commodities trading, digital industries, and financial and professional services will continue to sustain premium rents for high-value business functions and attract multinational firms,” the company said.

Catherine He, head of research, Singapore at Colliers, said easing interest rates have created a positive spread for investors, whilst higher rents are motivating some occupiers to own rather than lease.

“Despite limited repricing, Singapore offices remain attractive for their safe-haven status and steady yields,” He noted.