Scarcity in the CBD: Vacancies Hit New Lows, Rents Hold Firm
Singapore’s office market heads into October with reduced supply, limited new completions, and steady demand for prime CBD space.
Despite global economic headwinds, new tenants continue to prioritise quality fit-outs and prime locations. Landlords are becoming more strategic in tailoring space to meet tenant needs while working to remain competitive. With fewer options available, occupiers are facing tougher lease renewal negotiations, while new entrants often need to move more swiftly in their decision-making.
This makes it all the more important to partner with an experienced office space agency that can guide you through the process and help you secure the right space.
IN BRIEF
Limited new supply and steady leasing activity have pushed vacancies to historic lows, creating a scarcity value for premium CBD space.
Smaller, fitted offices remain in strong demand as occupiers seek flexible layouts and efficient footprints. This enables growth into larger premises without having to “write off” initial fit-out costs.
Larger tenants are relocating to attract and retain key staff with better amenities, or to secure greater value in buildings that also offer sustainability features.
Rental rates are firming through 2025, with landlords less inclined to negotiate and most rent-free periods reduced to a token—unless incorporated into broader rental packages.
Owners of older and mid-tier buildings face mounting pressure to refurbish, as tenants increasingly favour innovative, sustainable offices with advanced amenities and energy-efficient systems.
Visa to relocate to Paya Lebar Green as Anchor Tenant Ahead of Major Property Sale
Visa has committed as the anchor tenant at the new Paya Lebar Green project, taking over 200,000 sq ft in the South Tower, with a move scheduled for the first half of 2026. The development is now fully leased and up for sale at nearly S$600 million, drawing interest with its green credentials and strong lease profile. Visa’s shift from SingPost Centre marks ongoing tenant flight from older space towards modern, energy-efficient office buildings.
Learn more about Paya Lebar Green
The asking rent is the advertised quoted rate set by the landlord for leasing a space, but this amount is often negotiable. The effective rent reflects the actual average cost a tenant pays over the lease term after factoring in rent-free periods and other incentives.
This effective rate gives a clearer picture of what a tenant actually pays on average per month over the term of occupation i.e. some of the rent-free period might be outside the lease term. Negotiations typically involve a trade-off between the monthly rental rate and rent-free incentives, with landlords and tenants aiming to find a balanced deal. Understanding the difference between asking and effective rent can help tenants budget more accurately and make informed leasing decisions.
To learn more details about how these rental rates are calculated and their impact on office leasing, please visit our more detailed explanation here.
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Read more: The Benefits (and Potential Pitfalls) of Leasing a Fitted Office Space
Find out where the real value lies in Singapore’s office market.
Explore the latest rental rates across the island — from prime CBD districts to out-of-town business hubs.
Latest Rental Rates — October 2025
Looking for office space in Singapore?
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