I'll write the article based on the source context provided in the headline and known market data for Singapore's office sector.

The Market Move

Singapore Grade A office rents are forecast to rise approximately 5% in 2026, driven primarily by constrained new supply and resilient occupier demand across the Central Business District. Average gross rents for premium office space in the CBD currently sit at around S$11.80 per square foot per month, with prime assets in Marina Bay and Raffles Place commanding upwards of S$13.50 psf. The upward trajectory marks a continuation of the rental recovery that began in late 2023, as landlords regain pricing power amid tightening vacancy conditions.

  • Forecast rental growth (2026): ~5%
  • Average Grade A CBD rent: S$11.80 psf/month
  • Core CBD vacancy rate: ~4.2%
  • New supply pipeline (2026–2027): ~1.2 million sq ft

Supply Constraints Anchoring the Outlook

The fundamental driver behind the bullish rental forecast is a thin development pipeline. New office completions in 2026 are expected to total fewer than 600,000 square feet across the entire CBD, well below the ten-year annual average of roughly 1.1 million square feet. Major projects such as IOI Central Boulevard Suites have already secured significant pre-commitment levels, absorbing a substantial portion of incoming stock before completion. With limited speculative supply entering the market, vacancy rates in core micro-markets are projected to hold below 5%, giving landlords the leverage to push asking rents higher through lease renewals and new tenancies alike.

Demand Drivers Remain Intact

Occupier demand continues to draw support from several structural tailwinds. The technology sector, which had pulled back on leasing activity during 2023, has shown renewed appetite for quality floor plates as firms consolidate operations and re-hire in Asia-Pacific hubs. Financial services remain the largest demand segment, with global banks and asset managers actively seeking upgraded premises to attract talent in a competitive labour market. Family offices, which have proliferated in Singapore following regulatory incentives, are also contributing incremental demand for smaller but high-specification suites in premium towers. Cushman & Wakefield noted in a recent report that net absorption in the CBD office market turned decisively positive in the second half of 2025, a trend expected to carry through 2026.

Rental Performance Across Sub-Markets

Not all sub-markets are benefiting equally from the tightening supply dynamics. Raffles Place and Marina Bay continue to outperform, with prime rents in these districts rising 3–4% over the past twelve months. The Shenton Way corridor has also seen renewed interest, particularly from firms priced out of the most premium addresses seeking Grade A specifications at a relative discount. In contrast, decentralised office nodes such as one-north and Paya Lebar have experienced more modest rental adjustments, as tenants in those locations tend to be more cost-sensitive and enjoy greater supply optionality. The rental gap between CBD and fringe locations has widened to approximately 35–40%, reinforcing the CBD's appeal for prestige-driven occupiers.

What This Means for Investors

For investors evaluating Singapore office exposure, the combination of constrained supply and steady demand creates a favourable environment for income growth over the next 12 to 18 months. Grade A office assets in the CBD are currently transacting at capitalisation rates of between 3.2% and 3.6%, among the tightest in the Asia-Pacific region, reflecting strong institutional conviction in the market's fundamentals. REITs with significant CBD office portfolios, including Keppel REIT and Suntec REIT, stand to benefit from positive rental reversions as leases signed during the 2020–2022 period roll over at higher rates.

Forward Outlook

Beyond 2026, the supply picture remains supportive. The Urban Redevelopment Authority's confirmed pipeline suggests limited new completions through 2028, which could extend the current landlord-favourable cycle. However, investors should monitor potential headwinds from global economic softening and the gradual adoption of hybrid work models, which could temper net new demand growth. On balance, Singapore's office market appears well positioned to deliver mid-single-digit rental growth for the foreseeable future, underpinned by its status as a premier Asian business hub with deep pools of institutional and sovereign capital.