Positive momentum for office S-Reits as vacancy rates ease and rents climb

[SINGAPORE] In the third quarter of 2025, the Urban Redevelopment Authority reported a modest tightening in office vacancy rates, easing to 11.2 per cent from 11.4 per cent in the second quarter.

CBRE Singapore said that Grade A office rents rose 2.1 per cent year on year, underpinned by constrained new supply in the Central Business District core in the coming years.

This trend supported stronger performance among Singapore-listed real estate investment trusts (S-Reits) with significant domestic office exposure, driven by healthy occupancy levels, positive rental reversions and proactive asset management strategies.

Such S-Reits are CapitaLand Integrated Commercial Trust (CICT), Mapletree Pan Asia Commercial Trust (MPACT), Keppel Reit , Suntec Reit , and OUE Reit . 

As at Sep 30, CICT’s overall portfolio occupancy rate was 97.2 per cent, up from 96.3 per cent as at end-June.

The office segment recorded the largest improvement in Q3, rising by 1.6 percentage points to 96.2 per cent, with growth observed across Singapore, Germany and Australia. Its weighted average lease expiry (Wale) was 3.3 years.

Average rents for CICT’s Singapore office properties reached S$10.92 per square foot (psf) per month, a 1.9 per cent increase on the year.

The trust also completed its acquisition of the remaining 55 per cent interest in CapitaSpring during the quarter, resulting in full ownership of the asset.

MPACT’s office portfolio remained stable as at Sep 30. Among its Singapore assets, Mapletree Business City posted an occupancy rate of 93 per cent; other office and business park properties reported 99.1 per cent occupancy.

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Tenant retention rates were about 87 per cent, and the Wale for the office and business park assets was 2.4 years.

Overall portfolio revenue and net property income (NPI) declined year on year, due primarily to asset divestments and lower contributions from overseas markets.

On a comparable basis, MPACT’s Singapore properties recorded higher revenue and NPI. The trust continued its portfolio optimisation by divesting two Japan office buildings, maintaining its focus on core markets and quality assets.

Meanwhile, Suntec Reit’s Singapore office portfolio maintained a committed occupancy of 98.5 per cent as at Sep 30. Rent reversions were positive, with Suntec City Office Towers logging a 6.8 per cent increase, and One Raffles Quay as well as Marina Bay Financial Centre Towers 1 and 2 recording a 12.7 per cent uplift in the year to date.

Lease expiries were well spread, with a Wale of 2.5 years. Q3 revenue and NPI increased, supported by higher rents and lower operating costs. The manager expects the Reit’s stable performance to continue, underpinned by limited new supply and ongoing tenant engagement.

Keppel Reit sustained a committed occupancy of 96.3 per cent as at Sep 30, with a Wale of 4.7 years. It posted a robust rental reversion of 12 per cent for leases signed during the period, supported by demand from sectors such as financial services and technology.

NPI rose on higher rentals and stable occupancy. All of the Reit’s Singapore office assets hold Green Mark Platinum certification, with Ocean Financial Centre and Keppel Bay Tower also recognised for Super Low Energy status.

OUE Reit’s Singapore office portfolio reported 95.3 per cent committed occupancy and 9.3 per cent positive rental reversion. Average passing rent rose to S$10.91 psf per month.

Like-for-like commercial revenue grew 4.2 per cent on the year, and NPI climbed 3.8 per cent, supported by higher rents across all assets. The Reit noted that Singapore’s office market continues to benefit from resilient demand, limited new supply and a flight-to-quality trend.

Elsewhere, Lendlease Global Commercial Reit completed the divestment of its Jem office component, unlocking about S$8.9 million for distribution to unitholders. SGX RESEARCH

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.