Singapore Office Vacancy Falls to 10.8% as CBD Grade A Rents Continue Upward March

Singapore’s office vacancy rate fell to 10.8 per cent in Q1 2026, down from 11.1 per cent in the previous quarter, according to URA data released on 25 April. The improvement extends a tightening trend that began in mid-2025 as demand from technology, financial services, and family office tenants outpaced the modest flow of new completions.

Net absorption turned positive at 279,861 square feet of net lettable area during the quarter, indicating that occupiers are not only renewing leases but actively expanding their footprints. This is a notable shift from 2024, when many firms were downsizing or adopting hybrid work models that reduced space requirements. The return to positive absorption suggests that Singapore’s office market has found its post-pandemic equilibrium, with firms now optimising rather than shrinking their physical presence.

CBD Grade A office rents rose 1.4 per cent quarter on quarter to S$11.36 per square foot per month, reflecting sustained demand for premium, well-specified space in core financial district locations. The rental premium between Grade A and Grade B buildings has widened over the past year, as tenants prioritise buildings with green certifications, modern mechanical and electrical systems, and tenant amenity offerings.

Landlords of recently refurbished or newly completed buildings are commanding rents well above the district average, particularly in the Marina Bay and Raffles Place micro-markets. Conversely, older buildings that have not undergone asset enhancement are finding it harder to attract and retain tenants, even at lower asking rents – a pattern that mirrors the divergence seen in the retail sector.

Looking ahead, the office market faces a significant supply pipeline of approximately 9.3 million square feet, with major projects including IOI Central Boulevard Towers and several Jurong Lake District developments. While this volume sounds substantial, completions are staggered over several years and much of the space is pre-committed or earmarked for owner-occupation.

Market watchers expect vacancy to continue drifting lower through 2026 barring a significant global economic shock. The key risk remains the Middle East situation and its potential to disrupt trade flows and corporate expansion plans. However, Singapore’s position as a regional headquarters hub and wealth management centre provides a structural floor for office demand that few competing Asian cities can match.