Flight to Quality Trend Continues in Q2 2026
Office Market Snapshot
The "flight to quality" trend has continued to gather momentum in recent months, with space being taken up quickly in premium buildings across the New Downtown locality. IOI Central Boulevard West Tower is now almost full, with numerous negotiations still ongoing for the remaining available space. Marina Bay Financial Centre and Marina One have also proven popular with banks, including The Bank of New York Mellon, ANZ Banking Group and Taiwan Cooperative Bank, which have leased substantial space for their new offices.
IN BRIEF
Office tenants are likely to face particularly challenging conditions in 2026 and 2027, with limited new supply, reduced choice and uncertainty over how the Iran conflict may affect inflation, confidence and leasing demand.
Shaw Tower and 39 Robinson Road are the only major new completions, so tenants may need to be more flexible on location to secure the right space.
The flight to quality trend remains strong, with IOI Central Boulevard Tower continuing to attract major occupiers and filling up quickly.
Rental rates have edged up again, with Grade A rents now just above $14.00 psf and further growth of 2.5% to 3% still expected in 2026.
Leasing activity remains strongest in the CBD, especially around Tanjong Pagar, as displaced tenants from redevelopment projects continue to reshape demand.
Recent Movers
New set-up or coming from shared offices
- Financial Market: Rich Forever Family Office (6 Battery Road), Taiwan Cooperative Bank (MBFC Tower 2), Tobishi Management Group (IOI Central Boulevard Towers)
- Services: IDC Singapore (18 Cross St), Flow Digital Infrastructure (18 Cross St), FlexM Global (IOI Central Boulevard Towers), Rimkus (One Raffles Place Tower 1), HK Marine (Hub Synergy Point), NScale APAC (MBFC Tower 1), Riverbed Technology (MBFC Tower 2), MCC International Shipping (MBFC Tower 2)
- FMCG: Axon (IOI Central Boulevard Towers), Kopi Kenangan (Aperia Tower 2)
- Legal Services: Littler Asia LLP (Ocean Financial Centre)
- Commodities: Dong Fang Offshore (Hub Synergy Point), Singapore Bora Petroleum (MBFC Tower 2)
In Other News
Bugis Junction Towers Draws Interest at S$685 Million
The TPG Angelo Gordon-led consortium that owns Bugis Junction Towers is understood to be fielding interest for the 15-storey office building. The guide price is said to be S$685 million, in line with the recent valuation of the office asset, which is above the Bugis MRT station. This works out to about S$2,750 per square foot based on the Net Lettable Area of nearly 250,000 sq ft.
IOI Group Buys Asia Square Tower 2 for S$2.48 Billion
CapitaLand Integrated Commercial Trust (CICT): C38U 0% has sold its 100 per cent interest in Asia Square Tower 2 (AST2) to Malaysia-listed IOI Properties Singapore for nearly S$2.48 billion. Completion of the AST2 sale is anticipated in the second half of 2026.
The Great Singapore Office Sale: What’s driving the surge in deal activity in the office market?
Lower interest rates, tight office supply in the Republic’s Central Business District (CBD) and pent-up demand from investors armed with dry powder have helped to fuel a resurgence in Singapore office deals since the second half of last year.
Shell Singapore to lease 100,234 sq ft across three floors at Asia Square Tower 1
Energy and petrochemical company Shell Singapore will relocate to Asia Square Tower 1 in the Marina Bay financial district, taking up about 100,234 sq ft across three floors of the Grade A office tower, in the first half of 2027.
This counts as one of the largest office leasing transactions in Singapore in 2026 thus far, said Hongkong Land in a press release on April 24.
Market Forecast
We expect rents to rise by around 2.5% to 3% during 2026. The increase might have been greater, but cautious demand has helped keep growth in check. Over the next few months, the market will also need to watch the wider geopolitical situation, including the Iran crisis.
Higher energy costs and weaker business confidence could add to inflationary pressure and weigh on occupier sentiment if instability persists.The newest development due to be completed by mid-2026 is Shaw Tower, and we expect to hear more announcements about tenants taking up space there.
Need flexible office space in Singapore?
Co-working spaces and serviced offices can provide a flexible alternative to a traditional lease, whether you are a start-up, growing team or multinational business. Corporate Locations can help you compare options across Singapore and find a workspace that suits your size, budget and business needs.
Explore co-working and serviced offices in Singapore
