Prime Office Rents Rise 3q2025 Amid Limited Supply And Flight Quality Moves
According to the latest market report from real estate consultancies, rents for prime office space in Singapore have continued to increase in the third quarter of 2025. JLL’s quarterly office market report shows that Grade A office rents in the CBD have risen by 1.3% quarter-on-quarter to $11.83 per square foot per month (psf pm), the largest quarterly growth in the past six quarters.
The main reason for this growth is the inclusion of IOI Central Boulevard Towers in JLL’s monitored properties list. However, even without this addition, CBD office rents still saw a modest increase of less than 1%, which is similar to the growth seen in the past six quarters.
Dr Chua Yang Liang, head of research and consultancy for JLL Southeast Asia, notes that Singapore’s office market has been performing well, partly due to the country’s strong economic fundamentals and a favorable interest rate environment.
In a separate report, Knight Frank’s research shows that prime grade office rents in the Raffles Place and Marina Bay areas increased by 0.3% quarter-on-quarter to reach an average of $11.41 psf pm in the third quarter of 2025. This is consistent with the growth seen in the second quarter of 2025 and brings the total rental growth for the first nine months of the year to 0.4%.
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Knight Frank also found that occupancy levels for office spaces in Raffles Place and Marina Bay remained stable at 94.7%, while overall CBD occupancy increased from 93.7% in the second quarter of 2025 to 94.2% in the third quarter of 2025.
According to Knight Frank, the limited supply of office space and a cautious business environment have led to most rental activity being driven by lease renewals. However, some occupiers with expiring leases are choosing to relocate to newer and better-quality buildings, such as tech company Zoom Communications’ move from Asia Square Tower to IOI Central Boulevard Towers, and quantitative trading firm Jane Street’s plan to expand its space in the latter.
Looking ahead, JLL predicts that Grade A office rental growth in CBD will continue to be modest for the rest of 2025, with a projected full-year growth of around 3%. Going into 2026, they expect rental growth to pick up pace as the supply pipeline tightens. This may also result in rental rates surpassing some tenants’ budget limits, especially for whole-floor and multi-floor opportunities.
Knight Frank’s head of occupier strategy and solutions, Calvin Yeo, noted that selective upgrades to quality space have created a two-tier market, where newer and well-connected buildings thrive while older stock faces growing vacancy pressure. With limited office stock in the next few years, he expects quality buildings to remain almost fully occupied as more companies opt for newer and better-quality spaces. In contrast, older and poorly connected buildings may face increasing pressure to be redeveloped or modernized.
Despite the uncertain global environment, Knight Frank expects office occupier sentiment to remain cautious over the next six to 12 months. They predict that prime rental growth in the last quarter of 2025 will remain flat, with some marginal growth. This trend is expected to continue into the first half of 2026.