Singapore, October 14, 2025 -- The Singapore office market continued its upward trajectory in Q3 2025, marking the third consecutive quarter of rental growth, CBRE Research found. Gross effective rents for Core CBD (Grade A) offices rose by 0.8% q-o-q to $12.20 per square foot per month, underpinned by resilient occupier demand and tightening supply.
Tricia Song, CBRE Head of Research, Singapore and Southeast Asia, commented, “Despite the prevailing global economic uncertainties, the market has demonstrated remarkable resilience. Vacancy rates in the Core CBD (Grade A) have steadily tightened from 5.9% in Q1 2025 to 5.1% in Q3 2025, reflecting sustained leasing momentum and a relentless flight to quality.”
The market’s strength was illustrated in IOI Central Boulevard’s strong performance. This development is the last major Grade A completion in the Core CBD until 2028 and achieved approximately 90% commitment by Q3.
This strong take-up is demonstrative of the robust demand for premium office space, especially in the city centre as locations like Marina Bay and Raffles Place remain highly sought-after. Neighbouring submarkets like Marina Centre and Beach Road/City Hall have also outperformed, where less than 3% of space is available at the moment. With several notable deals to close in Q4, Core CBD (Grade A) office space vacancy could fall below 5% by the end of the year.
David McKellar, CBRE Head of Office Services, Singapore, observed, “Occupier activity remains broad-based, led by sectors such as banking and finance, transport, government, and agile space operators. Outside the CBD, demand is also strong. Paya Lebar Green, completed earlier this year, is now fully occupied following Visa’s relocation that absorbed the remaining space. This brought vacancy rates in decentralised locations down from 7.9% in Q2 to 6.5% in Q3.”
From Q1 to Q3, the market recorded net absorption of approximately 510,000 sq. ft. (excluding stock removed for redevelopment), while office rents have grown 2.1% year-to-date.
Mr McKellar added, “Looking ahead, the supply pipeline remains limited, especially for large occupiers seeking 200,000 to 300,000 sq. ft. of contiguous space. Beyond strata and smaller redevelopments, upcoming options are few, with Shaw Tower (2026), Skywaters (2027), Clifford Centre Redevelopment and Comcentre Redevelopment (2028) on the horizon to offer some relief down the line. The tight supply environment is prompting occupiers to accelerate decision-making to secure quality space before availability dwindles further in the short-term.”
Ms Song concluded, “CBRE Research maintains its 2025 rental growth forecast of approximately 3%. In fact, there might be potential upside as interest rates ease to support continued occupier activity, and as we see more leases completing in the final quarter.”
Office Investments Market on a Similar Trajectory
In brief
CBRE Research says Singapore’s Core CBD Grade A office rents rose for a third straight quarter in Q3 2025, reaching $12.20 per square foot per month after a 0.8% quarterly increase. The firm cites steady occupier demand and limited supply, while vacancy in the Core CBD narrowed to 5.1%. IOI Central Boulevard was about 90% committed by the quarter’s end, and Paya Lebar Green became fully occupied after Visa relocated there. Across Q1 to Q3, net absorption was approximately 510,000 square feet, excluding space removed for redevelopment. CBRE maintained its forecast of about 3% rental growth for 2025. Office investment deals also increased, reaching $1.794 billion in Q3, including a $1.045 billion sale of a 55% interest in CapitaSpring.
Key takeaways
- Core CBD Grade A rents climbed 0.8% quarter over quarter to $12.20 per square foot per month.
- Core CBD vacancy reached 5.1% in Q3, according to CBRE Research.
- IOI Central Boulevard was approximately 90% committed by Q3; Paya Lebar Green was fully occupied.
- Office transactions reached $1.794 billion in Q3, including the $1.045 billion sale of a 55% CapitaSpring stake.
- CBRE Research maintained its 2025 rental growth forecast of approximately 3%.
In the investment market, Q3 2025 office deals surged seven-fold q-o-q to $1.794 billion, with the largest transaction of the quarter involving the 55% stake sale of CapitaSpring for $1.045 billion ($2,822 psf). In contrast, Q2 2025 saw transactions involving only strata office units or floors.
Michael Tay, CBRE Deputy Managing Director and Head of Capital Markets, Singapore, commented, “The office sector is experiencing a resurgence of positive sentiment, thanks to strong fundamentals: rent growth, complemented by limited future supply. Adding to the positive outlook, the 3-month compounded SORA has fallen to 1.45%, positioning the sector favourably for yield-accretive returns. Buoyed by robust enquiry levels and advanced deal negotiations, we anticipate investment momentum to stay strong through the remainder of the year.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2024 revenue). The company has more than 140,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves clients through four business segments: Advisory (leasing, sales, debt origination, mortgage servicing, valuations); Building Operations & Experience (facilities management, property management, flex space & experience); Project Management (program management, project management, cost consulting); Real Estate Investments (investment management, development). Please visit our website at www.cbre.com.
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Questions around this news
What factors are supporting Singapore's Core CBD office rental growth?
The release attributes the market’s rental growth to resilient occupier demand and tightening supply. It also points to strong leasing at a new Grade A development, continued interest in prime city-centre locations, and demand across sectors including banking and finance, transport, government, and agile space operators.
What is the outlook for new Singapore office supply?
The release describes the near-term supply pipeline as limited, particularly for large occupiers seeking contiguous space. It names several developments expected to provide some additional options over the coming years, while noting that tight availability is prompting occupiers to make decisions earlier to secure suitable offices.
What does net absorption mean in the office market?
Net absorption measures the change in occupied office space over a period. It generally reflects space newly leased or otherwise occupied, minus space vacated. A positive figure indicates that occupied space increased, though the exact calculation and treatment of buildings or space removed from inventory can vary by report.
What does a 55% stake sale in an office property mean?
A stake sale transfers an ownership interest in a property or a property-owning entity. A 55% stake generally represents a majority interest, but the buyer’s decision-making rights, income entitlement, and responsibilities depend on the transaction agreements and how ownership is structured.
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