Central region office rents ease 0.2% as tenants flock to premium spaces

Premium towers stayed full whilst Central rents fell slightly.

Premium office buildings in Singapore’s Central Region recorded occupancy rates of at least 97% in the first quarter (Q1) of 2026 as tenants continued to shift towards newer and higher-quality workspaces, even as overall office rents edged down.

According to the latest ETC Digest by OrangeTee & ETC Research, the Urban Redevelopment Authority’s Central Region rental index fell 0.2% quarter on quarter (QoQ) in Q1, reversing the 0.4% increase recorded in the previous quarter.

Some locations within the central area posted rental growth, it added.

Island-wide office occupancy slipped to 95.0% in Q1 from 95.1% in the fourth quarter of 2025, whilst net absorption turned negative at 282,663 square feet (sq ft) net lettable area.

The firm said in the report that “flight-to-quality” movements spurred tight occupancy levels, as tenants favoured newer and higher-quality office spaces.

Non-central business district areas within the Central Region recorded occupancy of 97.2% in Q1, supported by positive net absorption of 45,206 sq ft net lettable area.

Occupancy in decentralised areas fell to 93.7%, reversing the previous quarter’s increase.

Office shadow space declined 2.3% QoQ to about 422,000 sq ft net lettable area, led by a fall of about 25,000 sq ft net lettable area in available shadow space in the Shenton Way, Anson Road, and Marina Centre areas.

The report said demand for higher-grade office space is expected to remain stable as lower interest rates continue to support investment activity.

It added that occupiers are expected to continue prioritising newer and higher-specification buildings.

On the supply side, the firm said new completions are expected to remain limited, with Shaw Tower the only major office addition expected in the second quarter of 2026.

It said the constrained supply pipeline could shift rental pricing power towards landlords and support rent growth during the year.

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