After seven consecutive quarters of rental growth, Singapore’s CBD Grade A office market is entering a period of accelerated appreciation that could see rents climb by as much as 7% in 2026, nearly doubling the pace observed throughout 2025.
Singapore’s prime CBD office rents could surge 7% in 2026, double the 2025 pace, after seven straight quarters of growth.
The numbers tell a compelling story.
Throughout 2025, prime office rents increased by 1.8%, building on the previous year’s 1.1% growth and demonstrating clear momentum in the market’s upward trajectory.
While these figures might seem modest at first glance, they represent sustained gains in a sector that had previously faced considerable uncertainty about economic conditions.
What’s driving this unexpected strength?
The answer lies primarily in a dramatic supply shortage.
Only 0.4 million square feet of CBD Grade A space is scheduled for completion in 2026, with an even smaller 0.2 million square feet planned for 2027.
Compare this to the historical annual net demand averaging 0.9 million square feet, and the supply-demand imbalance becomes strikingly apparent.
This scarcity is having predictable consequences.
Vacancy rates for CBD Grade A offices are projected to fall below 4.0% in 2026, creating intensely competitive leasing conditions that overwhelmingly favor landlords.
Historical patterns suggest that once vacancy dips beneath this threshold, rental acceleration typically follows, and current market dynamics appear to confirm this relationship once again.
CBRE’s forecast of 4% to 7% rental increases for 2026 represents a significant jump from the 2% to 3% appreciation projected for 2025, with most property consultancy groups anticipating faster growth ahead.
This acceleration reflects not just constrained supply, but also recovering occupier demand, which has remained steady despite limited availability.
Interestingly, the Grade A segment is outperforming lower-tier buildings, as tenants demonstrate persistent preference for quality space in prime locations.
This flight-to-quality trend disproportionately benefits institutional-grade assets while creating opportunities in decentralized office corridors, where cost-conscious firms are increasingly exploring alternatives as CBD pricing escalates.
The market tightness appears set to persist well into 2027, suggesting that Singapore’s prime office sector may be entering a landlord-favorable cycle that could extend beyond initial expectations.
The current supply pipeline represents the lowest in a decade, further reinforcing expectations of sustained rental pressure in the premium office segment.
Investment activity has also surged, with volumes increasing 28% to reach US$4.2 billion recently, as global capital recognizes the opportunity in this supply-constrained market.
By contrast, shophouse rents in heritage districts like Kampong Gelam have increased at a more modest 2% per year over the past two years, comparable to conventional retail rates but well below the acceleration seen in CBD office markets.
