Singapore’s office vacancy tightens at the top-tier

SINGAPORE, 30 March 2025 — The Singapore office market experienced a bright start to 2026, extending the positive leasing momentum from previous quarters as occupiers hasten to secure new and expansionary spaces, compelled by the tightening availability of new and quality spaces.

Latest data from JLL Research revealed that vacancy rate for CBD investment grade offices declined for the fourth consecutive quarter in 1Q26. The improvement was led by the Marina Bay sub-market, where vacancy fell from 7.2% in the prior quarter to 6.0%—its lowest level since the 1.26 million sq ft IOI Central Boulevard Towers came onto the market in mid-2024.

Andrew Tangye, Head of Office Leasing and Advisory for JLL Singapore, comments, “The supply of prime, high-quality office space in Singapore is tightening, as tenants increasingly compete for buildings that enhance employee experience and advance sustainability objectives. This heightened demand has led to some office spaces being re-let even before the current occupants vacate, illustrating the market’s momentum. Timing and brand reputation have become critical factors in securing leases, with landlords favouring reputable tenants able to commit to early occupancy.

Demand for premium, well-located, and highly amenitised Grade A properties continues to be robust. Organisations are investing in smaller, best-in-class spaces that serve as dynamic hubs for talent, culture, and innovation. Looking ahead, Singapore’s office market will be characterised by a powerful concentration of demand at the top end. Owners of older assets with strong location advantages have a unique opportunity to unlock value by upgrading or redeveloping their properties to attract this new wave of high-quality demand.”

Rents and Vacancy for CBD Grade A Office Space by Sub-market

Source: JLL Research

Positive demand absorption continued through 1Q26, even as office rents climbed to their highest level in over 17 years. However, the pace of this rental growth has moderated amid recent headwinds. The average gross effective rent for CBD Grade A offices inched up 0.5% qoq to SGD 12.04 per square foot (sq ft) per month in 1Q26, its highest level since 1Q09.

Dr Chua Yang Liang, Head of Research and Consultancy for JLL Southeast Asia, adds, “The recovery in the office market was again disrupted by renewed tariffs uncertainties as well as a surge in geopolitical tension. Office rents continued to trend upwards in 1Q26 but were unable to sustain the growth momentum of 2H25 as quarter-on-quarter gains fell back to the sub-1% region.”

While the external environment is expected to keep companies cautious, JLL projects that office space demand will continue to broaden in the upcoming quarters. This outlook is supported by Singapore’s economic resilience, a suite of supportive government policies, and a consistent inflow of international firms using Singapore as a strategic base to diversify into Southeast Asia.

Dr Chua concludes, "Singapore has often emerged stronger after every challenge, supported by our safe and stable sanctuary from global conflicts. While we do not anticipate it to be any different this time, the devil is in the details. Should oil and gas prices remain elevated for a prolonged period, it could drag down business and consumer confidence and, in turn, affect our economic growth.”

Adding on, Tangye states, “Beyond economic growth, the office market is also influenced by a notably constrained supply pipeline. Investment-grade office completions for 2026–2027 are anticipated to be at their lowest in three years. The major projects scheduled during this period are Shaw Tower, completing in 2026, and Newport Tower, set for 2027, while other upcoming developments are mainly boutique or strata-titled. This limited new supply is likely to contribute to a continued space shortage and may sustain CBD office rent growth in the range of 4–5% for 2026.”