CBD office rents steady in Q2

It was up by 1.1% QoQ, the highest increase since Q2 2023.

Office rents in Singapore’s Central Business District (CBD) remained steady in the second quarter of 2025, supported by low vacancy rates and a limited supply of new office space, according to Savills.

In Q2, City Hall posted the strongest rental growth amongst all CBD micromarkets, rising 1.1% quarter-on-quarter (QoQ)—the highest increase since Q2 2023.

It also recorded the lowest vacancy rate at just 2.2%, its tightest since Q2 2019. This marked a reversal from the first quarter of 2025, when the vacancy rate in City Hall ticked upward.

“Tenants are moving but not necessarily expanding,” said Alan Cheong, executive director of research and consultancy at Savills Singapore.

“Amidst an uncertain business environment, firms are consolidating space and prioritising quality over size,” Cheong added.

Across the CBD, Grade A office rents rose 0.3% QoQ for the fifth consecutive quarter.

Savills noted that leasing demand remains active but cautious, with most occupiers consolidating or relocating rather than expanding.

Correspondingly, the CBD Grade A office vacancy rate declined 0.7 percentage points (ppts) QoQ to 7%, due to improved take-up in selected buildings, particularly within the Grade A and AA segments.

Micro-market performance varied widely across the CBD. Marina Bay’s vacancy rate rose to 11.1%, due to the absorption of space from newly completed developments such as the IOI Central Boulevard Towers.

Vacancy rate in Tanjong Pagar climbed to 11.2%, whilst Orchard Road remained tight at 1.6% for the sixth consecutive quarter.

“With below-average new office completions for the next few years, we forecast CBD Grade A office rents to resume a more meaningful growth of 2% per annum in 2026 and 2027,” Cheong said.

Looking ahead, Savills said that the redevelopment of Shaw Tower will be the next major addition to the CBD, offering over 400,000 sq ft of new office space.

This is significantly smaller than the 1.26 million sq ft introduced by IOI Central Boulevard Towers and remains well below the 10-year average for new completions.