Grade A office rents may drop 5-10% in 2025 amid weak demand

Retail rents for both High Street shops and Prime shopping centers may decline by 0-5% in 2025.

Overall rents for Grade A offices are projected to decline by 5-10% in 2025 amid weak economic conditions and substantial supply, JLL said.

In its report, JLL noted leasing activity in the retail market has become polarized, with strong demand for prime locations in top-tier streets, whilst lower-tier streets struggle to attract tenants despite highly negotiable rents.

Retail rents for both High Street shops and Prime shopping centers are expected to decline by 0-5% in 2025.

In the residential market, JLL projects a 5% drop in home prices in 2025, driven by ongoing oversupply and high financial costs for developers.

For the capital market, it noted heightened macroeconomic uncertainties have led to cautious investor behavior and a decline in investment volumes.

However, a rise in distressed property listings is anticipated, presenting opportunities for opportunistic buyers.

Regarding land sales, JLL said reducing parcel sizes, attaching fewer supplementary conditions, and revising the assessment base for the URA's Home Purchase Allowance will enhance urban revitalization efforts and attract more developers.