Service sector growth to ease office vacancy in 2025

Office vacancy in 2024 rose 9.4%.

Office vacancy inched up to 9.4% in 2024, primarily due to the addition of the 1.25-million-sq-ft IOI Central Boulevard Towers to office supply, Newmark reported.

Grade A office rents rose by approximately 2% in 2024 and are projected to grow at a similar pace in 2025, driven by limited new supply in the CBD and sustained demand for premium office space.

Meanwhile, service sectors such as information and communications, financial services, and professional services expanded in 2024 and are expected to grow further in 2025, supporting additional office demand.

"With a limited development pipeline and sustained need for high-quality office space, we anticipate that rental growth will remain positive in 2025 and occupiers will continue to focus on workplace efficiency and employee experience, driving interest for prime spaces,” Chris Carver, executive managing director and head of Asia-Pacific Valuation & Advisory at Newmark said.