2025 Office Market Opportunities:
Securing the Best Space at the Right Time

The Singapore office market, which experienced a strong recovery post-Covid-19 with a 14.9% increase in Grade A office rents since early 2021, has recently seen growth flatten. By Q3 2024, vacancy rates rose to 7.8%, attributed to a significant influx of supply from the newly completed IOI Central Boulevard Towers. This, coupled with limited demand from major sectors such as tech and the growing prevalence of flexible working arrangements, has caused rents to plateau. Small-scale demand from private wealth and professional services firms has not been enough to counterbalance the decline in large-scale leasing activity.

Looking ahead, the office supply pipeline is expected to tighten as developers become more cautious about entering the market amidst rising costs and hybrid work trends. Key upcoming projects include the Shaw Tower redevelopment and Keppel South Central, but the withdrawal of the Jurong Lake District project highlights the risks of oversupply. Meanwhile, building redevelopments encouraged by government schemes are reshaping the market, with older properties being upgraded to meet sustainability standards. This trend could support rental growth in the medium term as obsolete buildings are replaced with more modern and efficient spaces.

It could also support rental growth in another way – restriction of office supply. The government incentive includes an increase in plot ratio and enlarging the development size, provided the scheme includes a high residential component, some including hotel space. Hence, the redevelopment of AXA Tower, Fuji Xerox Tower and Anson Centre will not be replacing all the space previously used for office purposes.

Despite current challenges, Singapore remains attractive for businesses due to its infrastructure, talent pool and pro-business environment. While rents for the prime sector are expected to remain under pressure in the short term, economic growth and increasing office usage, particularly from sectors like AI and tech, could drive demand. Companies like OpenAI planning to establish offices in Singapore highlight future optimism. The market is positioned for sustainable growth, balancing short-term uncertainties with long-term opportunities.

Opportunities in a Changing Market: Why Now is the Time to Reassess Your Office Space

For businesses considering whether to stay in their current office or relocate, the current state of the Singapore office market presents a unique opportunity. With flat rental growth, tenants now have greater bargaining power to secure better value. This is particularly true for prime office spaces, where landlords may be more willing to negotiate favourable lease terms or incentives such as rent-free periods and fit-out contributions. For companies looking to upgrade, this is an ideal time to move into high-quality spaces at competitive rates.

Location plays a critical role in office decisions, and with office rentals now stabilizing, particularly in core CBD areas, businesses have the opportunity to be more strategic about their positioning. Historically, these areas have seen significant fluctuations in rental rates between peak and low market conditions. The current stability allows businesses to plan more confidently for the future.

Companies can capitalize on this window to secure offices in prestigious locations, offering benefits such as improved employee accessibility, enhanced corporate image, and proximity to key business hubs, without undue concern about rental increases during their first lease renewal. Additionally, relocating to a newer, more efficient building can align with sustainability goals, boost employee satisfaction, and enhance productivity.

Next Steps: How Corporate Locations Can Help You Navigate the Market

If you're ready to explore your options in this evolving market, Corporate Locations is here to make the process seamless and efficient. Whether you're looking to compare rental rates (for lease renewal) , explore alternative available spaces, or get personalized advice, we've got you covered:

• Curious about the latest rental rates? Check out our online rental table, featuring up-to-date data on over 350 office buildings across Singapore.
• Want to browse current availability? Use our office search tool to view spaces in your current building or all units ranging from under $5 per square foot to Singapore’s top premium offices priced at $16+ per square foot.
• Need tailored recommendations? Share your size, budget and location preferences, and we’ll create a customized office listing for you. This includes the most competitive effective rents (not displayed online) and access to hidden spaces not listed in our database.

Have questions? Don’t hesitate to reach out—we’re always here to help and provide clarity. Our services to tenants are free of charge, covering all options conflict-free, with no obligations on the user.

Corporate Locations—tailored office solutions for your business. Define it. We'll find it.