Singapore Grade A office vacancy rises for the second consecutive quarter

The vacancy rate grew 1.7ppts to 7.4% in Q1.

From data compiled by Savills, the net take-up of CBD Grade A offices contracted by some 471,000 sq ft in Q1/2023, as a result, the overall vacancy rate for CBD Grade A offices rose 1.7 ppts to 7.4% in Q1/2023. This is the second straight quarter’s increase for vacancy. 

Here’s more from Savills:

Quarterly increases in vacancy rates were broad-based by grade. Grade A buildings saw the greatest rise of 2.1 ppts to 8.9%, immediately followed by Grade AA which increased 2.0% to 7.7%. Grade AAA offices’ vacancy was 5.5% in Q1/2023, reflecting a relatively moderate increase of 1.2 ppts from a quarter ago. 

By location, the rise in vacancy rate was led mainly by the Tanjong Pagar and Raffles Place micro-markets. These increased 5.9 and 3.1 ppts QoQ respectively. 

The increase in Tanjong Pagar mainly came from the unfilled space in the newly completed Hub Synergy Point, while the relocation of KPMG from Hong Leong Building to Asia Square Tower 2, together with the space gave up by some tech firms, partly lifted up the vacant stock in Raffles Place. 

Other than the City Hall and Orchard Road areas where the vacancy rates inched down 0.3 and 0.5 of a ppt respectively, other micro-markets (including Marina Bay, Shenton Way and Beach Road/Middle Road) posted a quarterly vacancy increase from 0.9% to 2.0%.