CBD Grade A office rents climb 0.5% in Q3 2025 as vacancy dips to 4.7%

The third quarter of 2025 brought another round of steady shifts in Singapore’s commercial property scene. Demand for both office and retail space remained firm, even as broader economic conditions stayed mixed. With supply tightening in some areas and new-to-market brands entering in others, Q3 provided a clearer picture of where the market might be heading into 2026.

Let’s dive into the findings from JLL Research and Cushman & Wakefield to see what happened across offices and retail in the past quarter.

Singapore’s economic setting shaped demand

Before we get into things, it helps to understand the larger economic picture. Our economy is still on track to grow between 1.5% and 2.5% in 2025, with an upgrade from earlier forecasts. Much of this strength came from front-loaded exports ahead of anticipated tariff increases from the United States. However, growth could moderate toward the end of the year as those tariffs take full effect globally.

On a positive note, interest rates have started to ease, inflation has cooled, and Singapore continues to benefit from relatively low tariff exposure compared to other Asia-Pacific economies. These factors supported occupier confidence, especially in the office market, where businesses are gradually looking at expansion again.

CBD Grade A office rents continued to climb

According to both JLL and Cushman & Wakefield, rents in the CBD for Grade A offices rose by about 0.5% compared to the previous quarter. This steady growth was largely driven by tighter availability, with vacancy rates narrowing to 4.7%, down from 5.2% in Q2.

Here’s how key CBD office submarkets performed in Q3 2025:

Source: Cushman & Wakefield

This means that if you’re a company looking for quality space in the CBD, you’re competing with more firms for fewer available options. Some tenants have responded by choosing renewals rather than relocations, especially when weighed against capital expenditure needs. Others have turned to more flexible setups like fitted-out or plug-and-play offices, which usually cost more but help cut upfront expenses.

Net absorption stayed healthy

Occupier activity stayed resilient in Q3. Net absorption for CBD Grade A offices reached about 197,000 square feet, building on 185,000 square feet in Q2. This shows that firms are still willing to take up space, even with higher rents and global uncertainties.

If you’re wondering where these moves are happening, much of the momentum came from the ongoing “flight-to-quality,” where companies trade older premises for newer, better-located ones. At the same time, a wave of redevelopment projects is pushing tenants out of older buildings, creating what’s known as displacement demand. Both trends are helping to fill up available space quickly.

Decentralised offices showed improvement too

While CBD space gets the spotlight, decentralised office areas also had their share of positive news. Vacancy rates outside the core business district fell from 7.2% to 5.3%, though rents only nudged up slightly by 0.1% in Q3.

With vacancies falling, Cushman & Wakefield expects decentralised office rents to grow faster in the coming quarters. This could appeal to occupiers who want to stay close to talent pools in suburban hubs while saving on costs compared to CBD rents.

Supply outlook: Tight pipeline ahead

Looking ahead, the supply of new CBD Grade A space will remain limited. From 2026 to 2027, only 0.6 million square feet is expected to be added, mainly from Shaw Tower in 2026 and Newport Tower in 2027. To put that into perspective, this pipeline is only about one-third of historical annual demand.

This shortage is already visible, with shadow office space dropping to just 93,000 square feet in Q3 – the lowest in nine years. With demand holding up and supply this tight, you can expect rents to rise further into 2026.

Key transactions in the office market

Several notable deals also shaped the quarter:

Source: Cushman & Wakefield

On the leasing front, big relocations included MSD and Jane Street Capital taking up space at IOI Central Boulevard Towers in Marina Bay, Comfort Delgro moving into Labrador Tower, and DP World Asia Pacific expanding in Raffles Place.

On the investment side, CapitaLand Integrated Commercial Trust acquired a 55% interest in CapitaSpring’s office and retail component for over S$1 billion, while Keppel bought the office portion of Jem in Jurong for S$462 million. 

JLL’s take: Strong demand for premium offices

JLL Research highlighted the same underlying trend – occupiers continue to prioritise premium spaces despite higher costs. The tight pipeline for new supply is putting further upward pressure on rents. While businesses are mindful of costs, the “flight-to-quality” theme is still driving activity.

JLL also noted that lower global interest rates and Singapore’s trade-friendly position in the region could draw more relocations into the city. This could further tighten demand in the CBD as multinational firms consolidate or upgrade into better-quality premises.

Retail market: Orchard and suburban malls stayed resilient

Beyond offices, the retail sector had a positive quarter as well. Prime retail rents in Orchard, Other City Areas, and suburban malls rose by 0.3%, supported by steady demand from new international brands.

Here’s a look at the retail rents and vacancies in Q3 2025:

Source: Cushman & Wakefield

Some names you might have noticed opening recently include Australian frozen yoghurt chain Yo-Chi at Orchard Central, Chinese beauty brand Joocyee at Wisma Atria, Flying Tiger Copenhagen at Bugis+, and U.S. athletic label Alo at Marina Bay Sands. These entrants show that global retailers still view Singapore as a prime testbed for expansion.

Suburban malls also saw rents inch up by 0.3%. These centres continue to benefit from strong non-discretionary spending, such as groceries and daily essentials, alongside low vacancy levels, which stood at 6.6% in Q2.

Limited retail supply coming up

The retail pipeline looks just as tight as the office market. Between 2026 and 2029, new supply will average just 0.3 million square feet annually, less than half the 10-year historical average.

Key upcoming projects include:

Source: Cushman & Wakefield

Some small projects are due sooner, such as CanningHill Square and Tengah Park Neighbourhood Centre in 2026, as well as Chill @ Chong Pang in 2027. Bigger additions like Bukit V Mall and the Tanglin Shopping Centre redevelopment will only be ready from 2028 onwards.

This means that, similar to offices, retail rents are likely to stay supported by tight supply over the next few years.

Outlook: Confidence with caution

The common thread in both the office and retail sectors is that demand continues to outpace supply, keeping rents on an upward trajectory.

For offices, the flight-to-quality trend and limited new completions mean CBD rents are likely to keep rising into 2026. Decentralised locations could also gain traction as vacancies shrink. For retail, steady demand from international and local brands, combined with very few big projects in the pipeline, should help sustain rental growth despite the challenges faced by certain operators.

At the same time, businesses are still being cautious. Many are balancing growth plans with cost controls, while occupiers are relying more on flexible leases or renewals to manage expenses. But overall, Singapore’s commercial property market remains resilient – and the third quarter proved just that.

The post CBD Grade A office rents climb 0.5% in Q3 2025 as vacancy dips to 4.7% appeared first on .