Is the commercial rental market in Singapore currently picking up or slowing down

The commercial rental market in Singapore is showing signs of moderate growth in 2025, particularly in the office sector. Grade A office rents in the Central Business District (CBD) have continued to rise slightly, with a 0.6% quarter-on-quarter increase in both the second quarter of 2025 and late 2024. This upward movement is underpinned by low vacancy rates, limited new supply, and resilient demand—especially for prime locations such as Marina Bay and Raffles Place, where landlords continue to have strong pricing power.

While demand remains relatively resilient, the market has seen some caution from occupiers due to ongoing economic uncertainties and higher financing costs. This has led companies to consider lease renewals over relocations to avoid significant expenses. However, no significant new completions of Grade A CBD offices are expected in the second half of 2025, and the supply pipeline for the coming years remains tight, which should help sustain modest rental growth even if demand softens slightly.

In decentralised locations, rental growth has been more subdued, with vacancies rising modestly but still experiencing some upward pressure on rents, especially in higher-quality developments.

Overall, the commercial rental market is not experiencing rapid acceleration, but is also not slowing down significantly. It remains steady, marked by selective growth in prime sectors and a requirement for strategic adaptation amid a cautious investment environment. Commercial assets, especially those in core locations or with green features, continue to attract investor attention, positioning the sector for long-term stability and gradual growth despite global uncertainties.