Office rents rise for fifth straight quarter as CBD vacancy tightens

Flight-to-quality demand and limited supply keep occupancy tight despite global uncertainty.

Singapore’s office market maintained positive momentum into 2026, with Core CBD Grade A rents rising for five consecutive quarters and vacancy reaching record lows amidst tight supply conditions, according to CBRE’s Asia Pacific Office Trends Q1 2026 report.

The report said strong occupier demand continued to support the market, whilst limited new supply contributed to tighter availability across core office locations. It added that the office sector remained resilient despite external uncertainty, including the Middle East conflict.

“The Middle East conflict constrained occupier decision-making in March, although no space rationalisation has been observed. The city’s office market remains well placed to absorb external shocks due to solid flight-to-quality demand and a shortage of supply,” CBRE said.

The report said leasing activity continues to be driven primarily by renewals, as ocupiers remain in place due to limited availability and high relocation costs adding that banking and financial services remain the key demand drivers, particularly in wealth management, hedge funds and quantitative trading.

CBRE also highlighted increasing activity from technology and artificial intelligence-related occupiers, with firms expanding and shifting from coworking spaces into traditional office leases.

Coworking operators remain active, supported by start-ups, project teams and international firms establishing regional operations.

The report said selected landlords are undertaking refurbishments of older assets in core locations to capture rental premiums, although such projects remain limited due to high capital expenditure and extended renovation timelines.

It added that whilst new supply is expected in 2028, existing pent-up demand and constrained availability are likely to support absorption of upcoming space.

CBRE said occupiers are expected to plan ahead for longer-term space requirements given ongoing supply constraints, whilst landlords are encouraged to maintain flexibility in rental strategies to support leasing activity and occupancy stability.

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