Market Research

• Many reports quote average (‘mean’) rental rates. These can be somewhat misleading, as an average rate of $11.50 psf could reflect a range anywhere from $9.00 psf to $14.00 psf. A more accurate assessment is to look at the ‘mode’ rate, which represents the rental rate that appears most frequently in the market.

• Currently, the mode rental rate for top Grade A buildings remains around $14.00 per sq ft. Upper mid-range office space typically records mode rates of approximately $11.50 per sq ft, while lower mid-range space is generally between $8.00 and $9.00 per sq ft.

• Market Forecast

  We anticipate that rental rates could rise by around 3% in 2026, albeit within a much quieter office leasing market. While it is difficult to predict market cycles with certainty, historical trends provide some useful reference points. Previous periods of market disruption or slowdown include:

  1992	Black Wednesday
  1997	Asian Financial Crisis
  2000	Dot-com Bubble
  2008	Global Financial Crisis
  2020	Covid-19
  2026	Potential lagged impact from global economic uncertainty and higher-for-longer interest rates

• The supply situation in Singapore is quite the opposite of other major European and US financial centres, and even other APAC financial hubs such as Hong Kong and Sydney. These markets are currently experiencing a significant oversupply of office space, leading to a slump in rents. In contrast, supply in Singapore is the tightest it has been for years, which is having a knock-on effect on rental rates.

  Some may argue that this could make Singapore less competitive. However, Singapore remains an important market in so many other respects that rising rental rates are something most businesses cannot avoid.

• The only major development scheduled for completion in 2026 is Shaw Tower (TOP targeted for June/July), comprising approximately 450,000 sq ft (see Page 7). To date, there have been limited major pre-commitments announced, with the exception of business centre operator The Great Room, which is understood to be leasing around 36,000 sq ft.

Several trends in the market have emerged and likely to continue.

1. Lack of Office Space for Large Space Users

   Large space users will find it increasingly difficult to source suitable space and may have to rely on stop-gap solutions, such as using ‘swing space’ or temporary space, until a new wave of supply comes on stream in 2028.

2. Landlord Fitted Out Space

   There has been some resistance to rising rents and, as a result, demand has softened. Consequently, more landlords are becoming proactive in responding to increased demand for fitted out space. Many landlords are now offering to fit out space, providing tenants with fully fitted units on a “Plug In and Go” basis. These options typically involve a base gross rental, plus approximately $2.00 per sq ft to amortise the cost of the fit-out works. See Page 3 of the Q1 2026 Market Review for a summary of some of the most popular options in this category.

3. Business Centre/Serviced Office Consolidation

   The consolidation of business centre and serviced office operators continues. Some operators are scaling down, including Ucommune at Bugis Junction and Prudential Tower, WeWork giving up space in Manulife Tower and UE Square, O2 at Collyer Quay Centre, and CityHub at 20 Collyer Quay.

   Other operators, however, continue to expand, such as ARCC leasing three floors in Bank of Singapore Centre, JustCo leasing several floors at 108 Robinson Road, The Executive Centre expanding in Ocean Financial Centre, and The Work Project in Asia Square Tower 2.