--- title: "Rents for Grade A office buildings in the central business district may rise by 4% to 7% in 2026 | Lianhe Zaobao" description: "According to the forecast by CBRE, the rental prices for Grade A office buildings in Singapore's central business district are expected to increase by 4% to 7% in 2026, up from 2% to 3% this year. The" type: "news" locale: "en" url: "https://longbridge.com/en/news/269698872.md" published_at: "2025-12-15T09:53:40.000Z" --- # Rents for Grade A office buildings in the central business district may rise by 4% to 7% in 2026 | Lianhe Zaobao > According to the forecast by CBRE, the rental prices for Grade A office buildings in Singapore's central business district are expected to increase by 4% to 7% in 2026, up from 2% to 3% this year. The tightening supply in the office market and the recovery in demand are driving rental increases, with Grade A office buildings outperforming Grade B. It is anticipated that the vacancy rate for Grade A office buildings will be below 4% in 2026, and the new supply of quality office space will fall to its lowest level in a decade Driven by the dual forces of tightening supply of new office buildings in the local market and a sustained recovery in demand, the rental prices for Grade A office buildings in the central business district may accelerate their increase next year, with a rise of 4% to 7%, higher than this year's 2% to 3%. According to the newly released "2026 Singapore Market Outlook" report by Cushman & Wakefield, the trend of companies "flight to quality" continues to differentiate the rental performance of Grade A and Grade B office buildings, with the former continuing to outperform the latter. In a tightening supply environment, any rebound in demand could push up rental prices, particularly benefiting Grade A office buildings. Cushman & Wakefield predicts that Grade A office rental prices will grow by 4% to 7% in 2026, while Grade B office buildings will see an increase of 2% to 3%. Rental prices for office buildings outside the central area are also expected to rise by 3% to 4%. ### Office Market Supply at a Decade Low One driving force behind the rising office rental prices is the reduction in office space supply. According to Cushman & Wakefield's forecast, the vacancy rate for Grade A office buildings in the central business district will narrow to below 4% by 2026. The new supply of quality office space next year will drop to the lowest level in over a decade, except for 2023, further pressuring an already tight market. In 2026, only one major Grade A office project, Shaw Tower, is expected to be completed, with new supply in 2026 and 2027 projected to be only 400,000 square feet and 200,000 square feet, respectively, far below the historical average net demand of 900,000 square feet per year. In contrast, the vacancy rate in the third quarter of 2025 was 4.7%, and it is expected to drop to 4.2% by the end of the year; while at the end of 2024, it was 4.6%. As the existing vacant Grade A office buildings decrease, the options for large tenants in the central business district are likely to become increasingly limited over the next two years. Overall, the national new supply of office buildings in 2026 and 2027 is expected to average about 500,000 square feet per year, which is only half of the historical net demand level. #### Further Reading Shortage of New Grade A Office Supply, Rental Prices May Rise 2% to 3% Annually in the Next Two Years Guo Huanian's daughter, Guo Huiguang, takes the helm of the company, leasing office space in World City under her father's name Although the new supply in 2028 will significantly rebound to approximately 2.2 million square feet, Cushman & Wakefield expects that one-third of it will be pre-leased before completion. ### Almost All New Office Buildings in 2024 Fully Leased Meanwhile, local office demand continues to grow. Cushman & Wakefield believes that the Singapore office market is supported by the macroeconomic environment, including declining interest rates, moderate inflation, and an enhanced status as a "safe-haven asset." This attracts more multinational companies to relocate their headquarters or regional teams to the local area, driving up demand. Additionally, the trend of companies "choosing the best" remains the main theme, as evidenced by the strong absorption rates of new projects. For example, the IOI Central Boulevard office building, completed last year, has been nearly fully leased; the still-under-construction Shaw Tower has already been pre-leased by about 18% in the third quarter of this year. Most new office buildings since 2024 have also been fully or nearly leased. Report data also shows that the "shadow space" that has been leased but not used has significantly decreased, falling below pre-pandemic levels in the third quarter of this year, indicating strong demand for high-quality and furnished office spaces. In terms of segmentation, Cushman & Wakefield noted that demand from technology companies remains moderate, while financial institutions and co-working operators show signs of continuous expansion. A survey by local office agency Corporate Locations also found that new companies, especially those from China and India, are leading the demand growth, while energy and commodities companies, technology firms and their partners, as well as insurance and capital management companies are also driving demand. 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