Q1 prime office rents rise 1.4% YoY as firms renew and upgrade spaces

Rents held steady at $11.36 psf per month.

Prime grade office rents in the Raffles Place / Marina Bay precinct held steady at $11.36 per sq ft (psf) per month in Q1 2025, unchanged from the previous quarter but up 1.4% year-on-year (YoY), according to Knight Frank.

The modest increase was supported by occupiers renewing leases at existing premises, alongside some flight-to-quality movements, Knight Frank noted.

In addition, the increasing adoption of AI technology across different job functions is enabling businesses to streamline operations—reducing the need to renew the same amount of space and instead making smaller space requirements feasible.

Meanwhile, the CBD area recorded an overall occupancy level of 93.5% during the period, down 0.2 percentage points quarter-on-quarter (QoQ).
According to Knight Frank, the slight easing in occupancy level could be attributed to the newly completed Keppel South Central, with a reported 50% of the space committed or under negotiation.

“The occupancies in the CBD were generally healthy as landlords continued to prioritise building occupancy amid global uncertainty,” Calvin Yeo, managing director for Occupier Strategy and Solutions at Knight Frank Singapore said.

The CBD office landscape is set for a supply pause following the completion of IOI Central Boulevard Towers and Keppel South Central. No substantial additions are expected in the near term, except for the Shaw Tower redevelopment on Beach Road.

“This poses a challenge for large footprint occupiers, especially those requiring close to 30,000 sf with premium-grade facilities. Floorplates of such sizes are rare, making relocation for large footprint occupiers unlikely in the short- to medium-term,” Yeo said.

Nevertheless, Knight Frank expects some businesses to relocate in measured flight-to-quality moves when leases expire.

“With the above dynamics in play, Knight Frank expects prime rental growth to range between -1% and 2% for the whole of 2025,” Yeo said.