What Happened?

Singapore’s office market ended Q4 on firmer footing.

According to URA’s latest data, office rents in the Central Region rose 0.4% quarter-on-quarter in Q4, reversing earlier softness. This marked a modest recovery after a subdued mid-year period.

At the same time, islandwide office vacancy eased to about 11.1%, down for the third consecutive quarter. Prime and newer office buildings saw even tighter conditions, particularly within the Core CBD.

👉 Rozi’s Field Notes
This wasn’t a sudden spike. It was a quiet firming. When rents rise even slightly while vacancies fall, it tells us demand is absorbing space faster than new supply is coming in. In property cycles, these are often the early signals before momentum becomes obvious.

Why Are Vacancies Tightening?

The key driver is supply discipline.

Q4 saw minimal new office completions, and in some segments, net supply was effectively negative. At the same time, occupiers continued consolidating into better-quality, ESG-ready and well-located buildings, creating a clear flight-to-quality trend.

👉 Rozi’s Field Notes
Not all offices are equal anymore. Tenants aren’t just renting space. They’re renting efficiency, branding and talent retention. Buildings that don’t evolve get left behind, even in a tightening market.

Where Is Demand Concentrated?

CBRE highlighted that Core CBD Grade A rents rose about 0.8% quarter-on-quarter in Q4, with vacancy falling to roughly 4.5% by year-end.

Demand remains strongest from finance and professional services, technology firms, and high-quality flexible workspace operators.

This demand is highly selective, favouring prime locations like Marina Bay and Raffles Place, while secondary locations stabilise more gradually.

👉 Rozi’s Field Notes
This mirrors what we see in residential too. Capital and demand flow first to the best assets. When uncertainty exists, occupiers don’t downgrade. They upgrade strategically.

What About Prices vs Rents?

Interestingly, while rents improved, office prices fell 0.7% quarter-on-quarter in Q4 and declined 2.1% for the full year, based on URA data.

This divergence suggests that owners are adjusting price expectations, and income stability from rents is improving faster than capital values.

👉 Rozi’s Field Notes
This is where experienced investors lean in. When rents stabilise before prices recover, it often creates a narrow window where yield-driven strategies outperform pure capital-gain plays.

What’s the Outlook?

Colliers expects continued rental growth in 2026, especially for Core CBD Grade A offices, forecasting increases of 2–4%.

This is supported by limited upcoming supply, continued demand for quality space, and Singapore’s position as a regional business hub.

Vacancy is expected to tighten further before any meaningful new supply enters the market.

👉 Rozi’s Field Notes
Markets rarely turn loudly. They turn quietly, then suddenly everyone realises the window has shifted. Q4 wasn’t about headlines. It was about foundations resetting.