Demand to remain resilient with modest rental growth in 2025.
The Singapore economy grew 4.0% in 2024 and outperformed the official forecast. Singapore’s economic growth outlook in 2025 is projected to be more moderate, against the backdrop of geopolitical tensions and higher global economic uncertainty.
Singapore expects to see resilient office demand supported by steady economic growth, a more stabilised interest rate environment, and higher office attendance in part driven by the Tripartite Guidelines on Flexible Work Arrangement (FWA) effective from December 2024. Banking and financial services, technology, and professional services firms are expected to dominate Singapore office leasing activity. Businesses’ quest for talent acquisition and retention will see the flight to quality trend continuing, in a market with limited future supply over the next 3 years, while some businesses will actively increase operational efficiency through rightsizing or relocation to a more efficient office space.
Keppel South Central is the only CBD Grade A office development scheduled to complete in Q1 2025. We expect a fall in vacancy and modest rental growth in the short term with CBD Grade A office in particular short supply.
