Singapore office market growth to slow amidst occupier caution, rising supply

The influx of new developments may lead to a more competitive leasing environment and potential pressure on rental growth.

Singapore's office market is experiencing low vacancy rates (sub-5%), but growth is slowing due to occupier caution and an increase in upcoming supply, Knight Frank said.

In its report, the firm said that whilst demand for prime office spaces remains stable, the influx of new developments may lead to a more competitive leasing environment and potential pressure on rental growth in the near future.

Meanwhile, the luxury residential market in Singapore is expected to remain subdued, influenced by cooling measures aimed at foreign buyers.

Despite this, demand from high-net-worth individuals (HNWIs) will continue to support the premium property segment. Investors are focusing on strategic opportunities, recognising Singapore's long-term potential as a safe and attractive destination for wealth preservation.

On the other hand, interest rate cuts in Singapore are expected to follow a gradual and cautious approach, aligning with broader APAC trends.

However, policymakers are likely to tread carefully due to global economic uncertainties, especially the potential inflationary effects of US trade policies under "Trump 2.0."

Knight Frank also noted sustainability and regulatory requirements are set to reshape the business landscape in Singapore. From 2025, all listed companies will be mandated to disclose climate-related risks, with large non-listed firms following suit by 2027.