Singapore Ranks Among World’s Most Expensive Prime Office Markets as CBD Demand Strengthens

Singapore has retained a place among the world’s most expensive markets for prime office space, ranking 10th globally in the latest assessment of occupier costs. The city-state’s position comes as demand for high-quality offices remains resilient and vacancy in its central business district continues to decline.

According to Savills’ latest Prime Office Costs report, the annual net effective cost for occupying prime office space in Singapore stands at S$202.81 per square foot, equivalent to US$158.52. The ranking places Singapore firmly within the global top tier, although Hong Kong and Tokyo remain the most expensive office markets in the Asia-Pacific region.

The figures highlight the continued premium attached to Grade A office buildings in Singapore, particularly in the CBD, where limited availability is helping support occupancy and rental performance.

Singapore’s Prime Office Market Remains Tight

One of the most notable developments in Singapore’s office market is the improvement in vacancy levels. Grade A office vacancy in the CBD declined to 5.6%, indicating that businesses continue to seek high-quality workplaces despite the relatively elevated cost of occupying them.

The combination of limited new supply and steady tenant demand has created a supportive environment for landlords of premium buildings. Businesses looking for centrally located, high-specification offices are therefore facing a market where attractive options can be relatively scarce.

Savills Singapore research executive director Alan Cheong said premium office buildings continue to maintain healthy occupancy and rental growth. He also pointed to expansion activity from parts of the financial services industry and hedge fund sector as an additional source of leasing demand.

This suggests that Singapore’s office market is not being supported solely by companies relocating existing operations. Some occupiers are also looking to increase their footprint, particularly in sectors where business activity and staffing requirements are expanding.

Expansion Deals Signal Stronger Corporate Confidence

The Singapore market is also benefiting from a broader international shift in office leasing behaviour.

Savills’ Market Makers report found that expansion transactions represented 58% of major office deals globally during the first half of 2026. By comparison, only 5% of the major transactions involved companies reducing their office footprint. Deals involving relocations or renewals at broadly similar space levels accounted for 37%, down from 44% in the second half of 2025.

The figures indicate a change in corporate behaviour. After several years in which companies reassessed office requirements and concentrated heavily on cost control, expansion is becoming a more visible component of large leasing transactions.

For Singapore, this trend could prove important because the city remains a major regional base for financial services, technology and international businesses. Additional space requirements from growing companies can place further pressure on already limited prime-office availability.

Flexible Office Providers Expand Footprints

Flexible office operators were identified as the occupier group most inclined to expand during the first half of 2026. According to the report, 78% of their major deals represented expansions.

More than half of those transactions involved taking new office space in markets where the flexible-office providers were already operating. This points toward a strategy of strengthening established locations rather than simply entering new markets.

The trend could have wider implications for prime office landlords. Flexible workspace companies can act as significant tenants, particularly in markets where businesses want greater flexibility in how they manage their workplace requirements.

As corporate demand evolves, high-quality buildings that can accommodate flexible working models and changing space requirements may remain particularly attractive.

AI Companies Become a Growing Source of Office Demand

Technology is another area influencing the global prime-office market. Artificial intelligence companies accounted for 17% of prime technology-sector office deals during the first half of 2026, compared with only 3% in the first half of 2024.

Every AI-related transaction recorded in the report was expansionary. The pattern reflects the rapid growth of the sector, its capital requirements and the need to attract specialised employees.

AI-related leasing remains concentrated in established technology centres, with San Francisco leading activity. Seattle and London’s West End also recorded notable activity during the period.

While Singapore was not identified as one of the main AI leasing centres in the report, the broader increase in technology-sector expansion illustrates how changes in the global economy are influencing demand for premium office space.

Prime Office Costs Continue to Rise Globally

The cost of occupying the best office space increased further during the second quarter of 2026. Savills reported a 1% quarterly increase in net all-in prime office occupier costs, which include rent and fit-out expenses. On a year-on-year basis, costs were up 5.3%.

The increase was uneven across regions. Asia-Pacific and Europe, the Middle East and Africa each recorded quarterly growth of 0.5%, while North America experienced a stronger 2.1% rise.

Several major cities recorded particularly sharp quarterly increases. San Francisco saw costs rise 7.7%, followed by Downtown New York at 5.6%, Washington DC at 4%, Seoul at 3.8% and Melbourne at 3.6%.

Singapore’s 10th-place ranking therefore comes within a broader global environment in which premium office accommodation is becoming increasingly expensive in several major business centres.

What Singapore’s Ranking Means for the Market

Singapore’s position among the world’s top 10 most expensive prime-office markets reinforces the strength of its central business district. The combination of declining vacancy, constrained new supply and expansion demand is providing support for high-quality office properties.

For occupiers, however, the market presents a more challenging cost environment. Companies seeking premium CBD locations may need to balance the advantages of prestigious and centrally located offices against rising occupancy expenses.

The situation also highlights the growing importance of supply. Savills noted that markets with more new developments and refurbished buildings can offer businesses access to high-quality space at more moderate costs.

For Singapore, where prime CBD availability remains relatively tight, the next phase of office-market performance will depend heavily on how quickly new supply becomes available and whether expansion demand continues.

For now, Singapore’s 10th-place global ranking shows that its prime office market remains highly competitive, expensive and resilient, with strong occupier interest helping sustain the value of top-tier commercial space.