Singapore’s GDP grew by 4.3% in Q4 2024, up from 2.2% in Q4 2023, with full-year growth at 4.0%. Key contributors included wholesale & retail trade, transportation & storage, and the information & communications, finance & insurance, and professional services sectors. The accommodation and food services sector also benefited from rising international visitor arrivals.

According to the URA Office Price Index, office prices moderated by 0.7% in Q4 2024 after a 0.6% increase in Q3. However, for the full year, prices increased by 1.8%, rebounding from a 4.2% decline in 2023. This signals a gradual recovery in the office market.

Strata Office Market Trends

The strata office market remained stable, with transactions rising from 320 in 2023 to 327 in 2024. This suggests continued investor confidence in commercial assets.

Office Space Demand Strengthens

Singapore’s office vacancy rate declined from 11.0% in Q3 2024 to 10.6% in Q4 2024, reflecting strong demand. Net occupied office space grew by 23,000 sqm in Q4 2024, up from 17,000 sqm in Q3, signaling expanding business activity and leasing interest.

Positive Business Outlook for 2025

The Business Expectations Survey indicates optimism in Singapore’s services sector. The Finance & Insurance sector anticipates improved business conditions, with banks expecting higher investment activities and loan demand amid potential interest rate cuts.

The office market in 2025 is poised for continued stability and gradual recovery, supported by economic growth, sustained demand for prime office spaces, and resilient business formation. Investors remain confident, particularly in core CBD locations, while rental trends show moderate adjustments across different regions.

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Prepared By:

Mohan Sandrasegeran

Head of Research & Data Analytics

Email: mohan@sri.com.sg