Singapore Grade A office vacancy rate increases to 6% in Q2

It’s the first increase after two straight quarters of declines.

From data compiled by Savills, the vacancy rate of CBD Grade A offices rose by a marginal 0.1 of a ppt to 6.0% in Q2/2024, after two consecutive quarters of quarterly declines. 

On a YoY basis, Savills said vacancy rate of overall CBD Grade A offices fell by a marginal 0.3 of a ppt. The vacancy rates of Grade AAA and A offices remained unchanged at 5.9% and 7.3% in the quarter, while Grade AA offices rose slightly by 0.2 of a ppt QoQ to 4.9%. 

Here’s more from Savills:

The slightly higher vacancy rates in Q2/2024 also corresponded to net absorption heading south to the negative territory for the first time after three consecutive quarters, to -20,000 sq ft. Nevertheless, the net demand for the first half of the year remained positive at 163,000 sq ft, which was higher than the -96,000 sq ft in the same period last year. 

By location, the increases in vacancy rates in three of the submarkets marginally outweighed the decreases in vacancy rates in three of the remaining submarkets, leading to that slight hike in vacancy rates. Quarterly declines between 0.1 of a ppt and 1.2 ppts were observed in Raffles Place, Tanjong Pagar and Beach Road/ Middle Road. 

On the other hand, three of the remaining submarkets registered QoQ increases in vacancy rates. Out of which, the largest increase came from Marina Bay, which recorded a growth of 0.4 of a ppt to 4.6. Vacancy rates of offices in Shenton Way and City Hall rose 0.3 of a ppt to 6.3% and 5.5% respectively. For City Hall, the increase in vacancy rates came after two consecutive quarters of decline. Vacancy rates of offices in Orchard Road remained unchanged at 2.7% in Q2/2024 after increasing by 0.2 of a ppt in the previous quarter. 

Compared to the same period last year, most of the submarkets recorded quarterly declines in vacancy rates. Five of the seven submarkets saw lower vacancies of between 0.3 of a ppt and 2.9 ppts on a YoY basis. The largest contraction came from Tanjong Pagar, with vacancy rates falling 2.9 ppts YoY.