Singapore CBD Grade A office vacancy declines for third straight quarter in Q3

The vacancy rate reached 6.2% during the quarter.

From data compiled by Savills, the vacancy rate of CBD Grade A offices inched up marginally, by 0.2 of a ppt to 6.2% in Q3/2024, extending the slight uptick of 0.1 of a ppt in the previous quarter. 

“Compared against the same period a year ago, vacancy rate of overall CBD Grade A offices continued trending downwards for the third consecutive quarter, this time, by a larger 0.7 of a ppt compared to the 0.3 of a ppt for the past two quarters,” the analyst said.

Here’s more from Savills:

Other than the vacancy rates of Grade AAA offices declining 1.0 ppts QoQ to 4.9%, vacancy rates of Grades AA and A offices rose in the quarter by 1.1 ppts and 0.3 of a ppt to 6.0% and 7.6% respectively. For Grade AA offices, this was the second consecutive quarter of increase. 

The increase in vacancy rate of CBD Grade A offices corresponded to net demand remaining in the negative territory by -54,000 sq ft. In the second quarter, it was -20,000 sq ft. As such, the net demand for the first three quarters of 2024 totalled 109,000 sq ft, lower than the 319,000 sq ft in the same period last year. 

By location, most of the submarkets recorded quarterly declines in vacancy rates in the quarter, with the exclusion of Raffles Place and Beach Road/Middle Road. Vacancy rates of Grade A offices in Raffl es Place and Beach Road/Middle Road were observed to increase over 1.0 ppts QoQ in Q3/2024, with a growth of 1.4 ppts and 1.6 ppts to 8.5% and 7.4% respectively. 

For Raffles Place, this was due to relocation of the larger tenants into the newly completed IOI Central Boulevard Towers, such as Amazon, which has occupied significant amounts of spaces across various locations. 

For Beach Road/Middle Road, the increase in vacancy rates was a result of higher vacancies from Duo Tower, Bugis Junction Towers and Gateway East. Vacancy rates in the other submarkets registered QoQ decreases in vacancy rates ranging from 0.2 of a ppt and 0.9 of a ppt. 

The largest decline in vacancy rate was from Shenton Way, with a contraction of 0.9 of a ppt. For Tanjong Pagar, the decrease of 0.6 of a ppt in the quarter was the fifth consecutive quarter of decline. 

On a YoY basis, the fall in vacancy rates of four submarkets was outweighed by the increase in vacancy rates of the remaining three submarkets, leading to overall higher vacancy rates of CBD Grade A offices compared to Q3/2023. The decline in vacancy rates ranged from 1.4 ppts to 4.6 ppts, while the growth in vacancy rates were between 0.2 of a ppt and 1.4 ppts. The largest YoY increase in vacancy rate came from Raffles Place.