Singapore office vacancy falls as stock shrinks and tenants take more space

Singapore’s office market tightened from two directions in the third quarter of 2026: tenants occupied 17,000 sq m more space, while the total stock of offices shrank by 72,000 sq m. Islandwide vacancy fell from 11% to 10%, according to the Urban Redevelopment Authority’s (URA) October 23 release.

The surprise is that additional occupation was the smaller of those two changes. For businesses looking for premises, the distinction matters: a market can have less empty space because firms take up offices, because offices leave the available stock, or both. This quarter, both happened, while Central Region office rents rose 0.8% from the previous quarter.

What actually doubled?

The headline number describes the increase in occupied office space: 17,000 sq m in Q3, compared with 8,000 sq m in Q2. That is a little more than twice the previous quarter’s increase, using URA’s figures rounded to the nearest thousand square metres. It is the quarterly increase that doubled—not the total amount of office space occupied in Singapore.

“Net demand” is shorthand for that change in occupied space. Think of it as the balance after increases and decreases in occupation across the market have been counted. It is different from adding up the floor area in every lease signed during the quarter.

That distinction helps explain why a busy leasing market and a modest net increase can coexist. A relocation can involve a substantial new lease, but the space left behind also matters to the market-wide balance. URA’s occupied-space figure captures the overall result rather than providing a count of corporate moves or lease agreements.

The useful comparison is therefore straightforward: occupied space increased in both quarters, and the increase was larger in Q3. The figures establish that more office space was occupied overall; they do not provide a tenant-by-tenant account of the businesses behind the change.

Why shrinking stock mattered more to empty space

The bigger movement was on the supply side. Singapore’s office stock fell by 72,000 sq m net in Q3, reversing a net increase of 19,000 sq m in Q2. Alongside the rise in occupied space, that helped bring vacancy down by one percentage point.

The arithmetic makes the relationship clearer. Empty space is total stock minus occupied space. Using URA’s rounded quarterly changes, a 72,000 sq m reduction in stock combined with a 17,000 sq m increase in occupation implies about 89,000 sq m less vacant office space. This is a calculation from the published figures, rather than a separately reported URA total.

On that calculation, the stock reduction was more than four times the increase in occupied space. It was the larger mechanical contributor to the decline in the amount of empty space. Reading the vacancy fall solely as a burst of tenant expansion would therefore miss most of the change.

There is a further wrinkle: vacancy is a percentage of the remaining stock. When stock changes, the denominator changes too. The 89,000 sq m calculation explains the reduction in empty floor area; the reported move from 11% to 10% expresses vacancy relative to the stock available in each quarter.

The aggregate figures do not identify which buildings account for the net withdrawal. Without building-specific evidence, it would be premature to assign the reduction to particular redevelopment projects or landlords. The supported finding is narrower, but substantial: the market ended the quarter with less office stock and more occupied space.

Why rents rose 0.8%, not one percentage point

The rental and vacancy figures measure different things—and cover different areas. URA’s 0.8% quarterly rental increase applies to offices in the Central Region. Its 10% vacancy rate is islandwide. They belong in the same market update, but they are not two readings of an identical pool of offices.

Nor are the units interchangeable. The vacancy rate fell by one percentage point, from 11% to 10%. The rental index rose by 0.8%. There is no reason those two movements should match numerically: one describes the share of space standing empty, while the other tracks rental change.

The pace of Central Region rental growth was unchanged from Q2, which also recorded a 0.8% increase. So the quarter brought a larger increase in occupied space and a reversal in stock growth, but no acceleration in the quarterly rental index. That is a more useful description than simply saying the office market strengthened.

For someone negotiating a lease, the index supplies context rather than a quotation. It describes the measured market’s overall movement, not a uniform 0.8% increase for every building or tenant. A particular offer still needs to be understood at the level of the premises involved.

The CBD’s premium offices tell a narrower story

Cushman & Wakefield’s separate Q3 report offers a closer view of the CBD’s Grade A office segment. It recorded 1.0% quarterly rental growth, while vacancy fell from 4.7% to 3.9%. Those figures describe the consultant’s premium-office segment, not Singapore’s entire office market.

The firm attributed leasing activity mainly to relocations by financial-services, professional-services and technology occupiers. It also identified global artificial-intelligence firms expanding or establishing a presence in Singapore. This is consultant analysis of activity in its market coverage, rather than a tenant breakdown accompanying URA’s islandwide statistics.

The two sources therefore answer different questions. URA shows the broad balance between office stock and occupation; the consultant report adds detail about conditions and occupier activity within a narrower CBD segment. Keeping those boundaries intact explains how an islandwide vacancy rate of 10% can sit alongside a much lower premium-CBD figure of 3.9%.

What could change the balance next?

URA reported about 875,000 sq m of office space in the development pipeline at the end of Q3, up from 848,000 sq m a quarter earlier. That is an increase of 27,000 sq m, calculated from the published totals.

But the pipeline is measured in gross floor area and represents future development, not immediately available lettable offices. It should not be added to today’s vacant space as though businesses could move into all of it now. Its relevance is to the future supply picture.

The next useful comparison will be whether occupied space continues to rise, and whether the stock of offices keeps shrinking or begins growing again. Q3’s clearest finding is that Singapore had less empty office space—but the larger change came from a smaller stock of offices, not additional occupation alone.