Decentralised Office Rents Fall Firms Relocate Cbd Jll
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After multiple quarters of moderate growth, CBD office rents in 2Q2025 experienced a slight uptick, with Grade A gross effective rents rising by 0.7% q-o-q to $11.69 psf per month. This marks the fifth consecutive quarter of gradual growth, according to JLL.Furthermore, the decentralised office sub-market saw a decline in rents in 2Q2025, the first decrease in four years. Rents in this market fell by 0.8% q-o-q to $7.61 psf per month in the last quarter, largely due to the ongoing rightsizing efforts of companies and a surge in demand for space in the CBD, says JLL.CBD and decentralised office rent growth (q-o-q)Source: JLLAccording to Andrew Tangye, head of office leasing and advisory at JLL Singapore, there is a rising trend of “strategic recentralisation” and “quality-driven relocations” to CBD offices. He explains that many businesses in Singapore are transitioning towards more high-value offerings and enhanced service models, leading to a significant shift of office demand from decentralised areas to CBD spaces, which are better suited to accommodate their increasingly sophisticated and client-focused operations.Read also: Fifth floor of Tung Ann Association Building along Cecil Street for sale at $11.5 milAdvertisementFurthermore, Tangye cites the example of Audi Singapore, which recently relocated its offices from Aperia on Kallang Avenue to Capital Square in the CBD. He notes that the move coincided with the relocation of the showroom from Alexandra Road to 18 Cross Street, just a short walk from Capital Square.Among other reasons, low rental gap between CBD offices and those in decentralised areas may also drive more companies to move to the CBD. According to Dr Chua Yang Liang, JLL’s head of research and consultancy for Southeast Asia, the current average rent gap between investment-grade offices in the CBD and those in the decentralised sub-market stands at about 30% to 35%, which is noticeably lower than the historical range of 50% to 60%.As relocation activities continue to bolster demand, office rents in the CBD are expected to remain relatively stable, with JLL predicting a moderate growth of 2% this year. However, rents may witness a spike in 2025, due to scanty supply. Chua mentions that there are no significant office completions set to occur within the next 12 months, except for the new Shaw Tower, which is scheduled to be completed in 2H2026.In addition, Chua mentions that the redevelopment of 79 Anson Road, which is expected to commence next year, will further exacerbate the constraints on supply.Meanwhile, Tangye believes that property owners with idle space are prioritising the occupancy of their properties and the stabilisation of their portfolios in preparation for 2026. He also highlights that landlords are implementing targeted property enhancements, such as refurbishing lobbies and washrooms and modernising outdated office spaces, in order to attract elite tenants and harness the expected rental growth prospects.