Singapore CBD Office Vacancy Holds Steady at 7% in Q3

Learn more about office requirements and empty spaces. According to data collected by Savills, following a decline in two straight q...

Learn more about office requirements and empty spaces.

According to data collected by Savills, following a decline in two straight quarters, the vacancy rate for CBD Grade A offices stayed the same at 7.0% in Q3/2025. Nevertheless, compared to the same period last year, vacancy rates increased by 0.9 percentage points.

Although the vacancy rates for Grade AAA and A offices fell by 1.1 percentage points and 0.3 of a percentage point, reaching 7.3% and 5.9% respectively during the quarter, there was a counterbalance due to a rise of 1.5 percentage points in the vacancy rate for Grade AA offices, reaching 7.6%, mainly driven by the addition of the newly finished Keppel South Central to the office inventory, according to the report. Without Keppel South Central, the vacancy rate for Grade AA offices would have dropped considerably by more than 2.0 percentage points.

Here’s more from Savills:

In the premium Grade AAA office sector, the decline would mark the third straight quarter of reduction. Nearly all structures within the Grade AAA office portfolio experienced gains in occupancy rates, as companies took a "flight-to-quality" approach.

In a similar context, the vacancy rate for Grade A offices decreased for the fourth straight quarter, with a vacancy level of 5.9% being the lowest since Q2/2020, when it stood at 4.9%. Conversely, the rise in vacancy rates for Grade AA offices followed two consecutive quarters of reduction, as tenants continue to slowly move into Keppel South Central, which received its completion certificate in Q1/2025. Without this project, buildings that had substantial empty spaces were experiencing a gradual return of tenants seeking more affordable rental options.

For example, Capital Square saw a significant portion of its space remain empty after Amazon and Morgan Stanley vacated. The vacancy rate in the office building decreased as new occupants like Quantedge Capital, Audi Singapore, and Sumitomo Mitsui Banking Corporation (SMBC) moved in.

Therefore, in the overall CBD Grade A office market, net demand stayed positive for the fourth quarter in a row, rising to 525,000 sq ft in Q3/2025 compared to 245,000 sq ft in Q2/2025.

The percentage of unoccupied spaces in CBD Grade A offices saw an improvement in all micro-markets, except for Tanjong Pagar, where the rate increased to 25.3% because of the addition of Keppel South Central to the office inventory. It is important to mention that the vacancy rate in this area would have decreased if Keppel South Central had not been included in the calculation. As tenants keep moving into the building, it is anticipated that vacancy rates will continue to decline and reach a stable level over the next few quarters.

Among the micro-markets experiencing a quarter-over-quarter decline in vacancy rates, the most significant reduction was noted in Raffles Place, which dropped from 7.5% in Q2/2025 to 5.3% in Q3/2025, the lowest level since Q2/2020 when the vacancy rate hit 4.2%. Likewise, vacancy rates in Marina Bay and Shenton Way saw a contraction of more than 1.0 percentage points on a quarter-over-quarter basis. Vacancy rates in other micro-markets fell by between 0.1 and 0.5 percentage points quarter-over-quarter in Q3/2025.

Despite a quarterly decrease in office vacancy rates, the rate remained higher than that of the same quarter in the previous year. This increase was linked to growth in the Tanjong Pagar micro-market. However, even without considering the Tanjong Pagar micro-market, the office vacancy rate in Marina Bay also increased by 5.4 percentage points YoY, which was also caused by the addition of IOI Central Boulevard Towers in Q4/2024.

On the contrary, the other five micro-markets experienced year-over-year decreases in vacancy rates, with office vacancies in both Raffles Place and Beach Road/Middle Road dropping by more than 3.0 percentage points. The year-over-year reduction in vacancy rates in the remaining micro-markets ranged from 0.8 percentage point to 2.7 percentage points.