Colliers has released its Q1 2025 Singapore Office Market Report, revealing that whilst Core CBD Premium and Grade A office rents saw a slight decline of 0.1% quarter-on-quarter, they held steady at S$11.67 per square foot. Despite this marginal dip, some premium buildings experienced rental growth, highlighting the resilience of the market amidst tightening supply.
The report indicates a vacancy rate increase to 7.6%, attributed to the addition of Keppel South Central, which is nearing 50% occupancy. However, with limited new supply expected over the next two years, vacancies are anticipated to decrease, potentially leading to rental growth. Colliers advises tenants to act swiftly to secure space as options dwindle, whilst landlords of older buildings are encouraged to upgrade to remain competitive.
Tridiana Ong, Executive Director and Head of Tenant Representation at Colliers Singapore, noted, “The core CBD Premium and Grade A segment is expected to outperform due to limited supply and resilient demand for quality spaces in the CBD.”
The report also highlights that office demand will likely remain broad-based in 2025, with non-bank financial firms and technology firms continuing to drive space requirements. Catherine He, Head of Research at Colliers Singapore, added, “The office sector holds significant potential for investors to value-add due to the widening gap between older buildings and modern spaces.”
As the market evolves, the focus is expected to remain on renewals and flight-to-quality moves, with companies seeking modern spaces that align with new workplace trends and employee expectations.
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