Singapore Grade A office vacancy hits record highs since Q1 2022

The vacancy rate reached 7.1% in Q3 2023.

From data compiled by Savills, the vacancy rate of Singapore CBD Grade A offices rose in Q3/2023, unchanged in the previous quarter, increasing 0.6 of a ppt QoQ to 7.1%, the highest since Q1/2022. 

“This was largely led by the inclusion of Guoco Midtown into the office stock, which brought about an increase in vacancy rates of Grade AAA buildings from 5.5% in Q2/2023 to 7.2% in Q3/2023. This was the fourth consecutive quarter of increase. Similarly, vacancy rates of Grade A offices also inched up 0.5 of a ppt to 8.2% in the quarter,” the analyst said.

Here’s more from Savills:

On the other hand, the vacancy rate of Grade AA offices saw a second consecutive quarter of decline, decreasing 0.9 of a ppt to 6.1%. Although there was an increase in vacancy rate of overall CBD Grade A offices, the net demand turned positive to 415,000 sq ft in Q3/2023, after three consecutive quarters of negative take-up. This was supported by tenants moving into the newly completed Guoco Midtown. 

By location, almost all the micro-markets recorded QoQ decreases in vacancy rates, particularly for Tanjong Pagar and Beach Road/Middle Road which observed declines in vacancy rates of 1.0 ppts and above. 

On the other hand, vacancy rates in Orchard Road inched up marginally by 0.2 of a ppt QoQ to 1.1%, while that in City Hall recorded a jump as the tenants at Guoco Midtown that have committed space have not all moved in.