Decentralised Office Rents Fall Firms Relocate Cbd Jll
Article Rewritten:
Despite the current challenges in the global economy and geopolitical landscape, CBD office rents have continued to rise in the second quarter of 2025. According to JLL, gross effective rents for Grade A office spaces have increased by 0.7% quarter-on-quarter to reach $11.69 per square foot per month. This marks the fifth consecutive quarter of sub-1% growth.
In contrast, the decentralised sub-market has seen a decline in office rents for the first time in four years, with a decrease of 0.8% quarter-on-quarter to $7.61 per square foot per month. JLL attributes this decline to companies right-sizing and relocating to either the CBD or closer to it, due to the availability of more office spaces in these areas.
The table below shows the comparison between CBD and decentralised office rent growth:
*insert table*
Andrew Tangye, the head of office leasing and advisory at JLL Singapore, has observed a growing trend of “strategic recentralisation” and “quality-driven relocations” to CBD offices. He notes that many businesses in Singapore are moving towards offering higher-value services and improving their customer experience, which has led to an increase in demand for offices in the CBD.
One example of this trend is Audi Singapore, which recently moved its offices from Aperia on Kallang Avenue to Capital Square in the CBD. The move coincides with the relocation of their showroom from Alexandra Road to Cross Street, which is just a short walk away from Capital Square.
Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia, believes that the current lack of a significant gap in rent between CBD and decentralised offices may motivate more companies to relocate to the CBD. He points out that the average rent gap between investment-grade offices in the two locations is currently at 30% to 35%, which is lower than the historical range of 50% to 60%.
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JLL predicts that office rents in the CBD will continue to grow modestly this year, with a projected growth of 2% for the full year. However, there may be a pickup in rents in 2025, as there is limited supply. Chua notes that there are no major office completions expected in the next 12 months, and the new Shaw Tower will only be completed in the second half of 2026.
Chua also points out that the redevelopment of 79 Anson Road, which is expected to start next year, will further constrain the supply of office spaces. Meanwhile, Tangye believes that landlords with vacant office spaces are focusing on increasing occupancy and stabilising their portfolios before 2026, when rents are expected to rise again before new supply enters the market in 2028. He adds that property owners are implementing targeted improvements, such as modernised lobbies and updated facilities, to attract high-end tenants and take advantage of potential rental growth opportunities in the future.