キーポイント
- The “flight-to-quality” movement that was evident in the previous quarters seem to have tapered off, which was supported by the lack of new supply of premium office buildings and strong occupancies of existing buildings.
- According to data compiled by Savills, the vacancy rate for CBD Grade A offices dipped by 0.1 of a percentage point (ppt) quarter-on-quarter (QoQ) to 6.6% in Q1/2026. This was the second consecutive quarter of decline and the lowest since Q3/2024 when vacancy was at 6.1%.
- The limited supply pipeline and low vacancies of premium offices enabled landlords to have strong holding power and increase the asking rents. As such, average CBD Grade A office rents continued to rise for the eighth consecutive quarter by 0.6% QoQ to S$10.02 per sq ft in Q1/2026.
- Although geopolitical tensions remain high, the low vacancy levels and a low new supply environment is shoring up Grade A CBD office rents. Considering all these points, we have revised our rental forecast for 2026 upward, from 2% to a range of 3%–5% year-on-year (YoY) growth. Gross rents could receive additional upward support should energy costs rise further, and landlords pass these increases through to tenants.
