Momentum in Singapore’s office market is set to persist, says Colliers’ Singapore managing director Bastiaan van Beijsterveldt. This is underpinned by tight CBD supply, resilient enquiry, solid economic fundamentals and a more conducive interest rate backdrop, he adds.
After Keppel South Central, there are no new CBD Grade A completions until 2027. The pipeline remains thin and availability is scarce, supporting a backdrop favouring landlords. According to Colliers Singapore’s 4Q2025 Office Insights and Outlook, rental growth for Core CBD Premium and Grade A assets is expected to come in between 2% and 4% in 2026.
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“Interest in fitted, smaller footprints has persisted as occupiers manage cost and speed-to-occupation,” notes Colliers. The Nasdaq-listed professional services and investment management firm expects more companies to move back into the CBD from fringe areas as they emphasise convenience and office attendance.
With rents edging higher, a flight to value has emerged, reads Colliers’ four-page report. “Tenants considering relocation are targeting savings from current rents to justify capex outlays, exploring locations that offer competitive pricing without compromising on connectivity and amenities.”
Negotiations are also taking longer to conclude, according to Colliers, amid macro caution and the scarcity of “large, contiguous” CBD space. “Many firms are deferring major commitments, contributing to a cautious tone despite healthier enquiry pipelines.”
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Capital values hold steady
Prime pricing held firm in 4Q2025. Average Core CBD Premium and Grade A capital values rose slightly to $3,100 per sq ft from $3,050 per sq ft at end-2Q2025, while net yields declined to 3.6%.
During the quarter, a 33% stake in Marina Bay Financial Centre (MBFC) Tower 3 transacted at $3,268 per sq ft with 80 years remaining on the lease. This underscores investor conviction in landmark CBD assets in the long term, says Colliers.
Meanwhile, Keppel REIT’s acquisition was dilutive for shareholders and had to be funded via a preferential offering. In parallel, seller Hongkong Land (HKL) announced that it will launch an $8 billion private real estate fund seeded with prime Singapore offices, including One Raffles Link, and stakes in One Raffles Quay and MBFC Towers 1 and 2.
Colliers believes the initiative signals ongoing interest in core CBD assets, with HKL noting that it plans to use the recycled capital to further invest in prime commercial properties. “Easing interest rates have widened investment spreads, while higher rents are prompting some occupiers to consider ownership, sustaining demand in the strata office market.”
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