As at the end of 4Q2025, there was a total supply of about 867,000 sqm in gross floor area (GFA) of office space in the pipeline, compared with the 870,000 sqm GFA of office space in the pipeline in 3Q2025.
The amount of occupied office space remained unchanged in 4Q2025, compared with the increase of 1,000 sqm in 3Q2025.
The stock of office space decreased by 7,000 sqm in 4Q2025, compared with the decrease of 24,000 sqm in 3Q2025.
As a result, the islandwide vacancy rate of office space decreased to 11.1% as at the end of 4Q2025, from 11.2% as at the end of the previous quarter.
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Limited new stock in 2026
With limited new supply in the near term and the rising fit-out cost, more occupiers opt for renewal as means to manage capex, says Wong Shanting, research head at Newmark. “Rents for Premium and Grade-A office space could rise between 3% and 5% by end-2026.”
New stock in 2026 is limited. The only major new completion is the redevelopment of Shaw Tower (0.4 million sq ft), which is on track to be completed in mid-2026.
Separately, 39 Robinson is expected to complete its refurbishment by the year-end, but will contribute only about 0.1 million sq ft of office space.
The supply crunch in the Downtown Core is expected to ease after 2026, adds Wong, with the completion of Newport Tower in 2027, followed by Clifford Centre and The Skywaters in 2028.
Previously available office spaces are being filled. Hence, Chua Yang Liang, JLL’s head of research and consultancy, Southeast Asia, sees a tighter 4%-5% office rent growth in 2026.
IOI Central Boulevard Towers, which was completed in 3Q2024 with 1.26 million sq ft, is over 95% filled; while Keppel South Central’s 0.6 million sq ft of space is almost 35% committed. “Vacant spaces at South Beach, Marina One and Capital Square were also absorbed by new tenants or existing occupiers expanding within their buildings,” Chua writes.
Divergence in quality
Cushman & Wakefield notes a “wider divergence” in vacancy rates between “well-located, modern office stock” and older office assets.
Category 1 office vacancies tightened for a third consecutive quarter to 9.3% in 4Q2025, while Category 2 stock continued to see rising vacancies to 11.9% from 11.6% in 2Q2025.
According to URA, Category 1 refers to office space in buildings located in core business areas in Downtown Core and Orchard Planning Area, which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area. Category 2 refers to the remaining office space in Singapore.
In 2026, Cushman & Wakefield expects CBD Grade-A rental growth to exceed the 2.4% recorded in 2025.
The Singapore office market is becoming “increasingly bifurcated”, says Newmark’s Wong. This is driven by resilient demand for premium space, supported by stabilising hybrid work patterns and rising in-person attendance. In addition, Wong notes a sustained flight-to-quality trend driven by sustainability reporting requirements.
“At the same time, ongoing redevelopment initiatives for older office buildings are expected to displace tenants, further tightening vacancies and supporting elevated rents in the premium and Grade A office segment,” adds Wong.
Landlords of older properties may selectively offer additional incentives or fitted-out solutions to appeal to prospective tenants, bridging specification gaps, says Knight Frank Singapore research head Leonard Tay.
With demand strengthening and supply tightening, tenants will increasingly compete for the same limited space in quality CBD office buildings, says JLL’s Chua. “This will enable landlords to secure replacement tenants before current occupants vacate, thereby reducing vacancy exposure and maintaining their pricing power. Rental growth is thus expected to continue to pick up in 2026.”
Retail rents rise at quicker pace as occupancy rises
Meanwhile, prices of retail space increased by 1.7% in 4Q2025, compared with the 0.7% decrease in the previous quarter.
Rentals of retail space increased by 0.6% in 4Q2025, compared with the 0.9% increase in the previous quarter.
For the whole of 2025, prices of retail space increased by 3.0%, compared with the increase of 1.0% in 2024, while rentals of retail space increased by 1.9%, compared with the increase of 0.5% in 2024.
As at the end of 4Q2025, there was a total supply of about 560,000 sqm GFA of retail space in the pipeline, compared with the 530,000 sqm GFA of retail space in the pipeline in the previous quarter.
The amount of occupied retail space increased by 34,000 sqm in 4Q2025, compared with the increase of 22,000 sqm in the previous quarter.
The stock of retail space decreased by 4,000 sqm in 4Q2025, compared with the increase of 6,000 sqm in the previous quarter.
As a result, the islandwide vacancy rate of retail space decreased to 6.3% as at the end of 4Q2025, from 6.9% as at the end of the previous quarter.
Tables: URA
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