Chart of the Day: CBD Grade A space market could remain constrained until 2021

Only one office building is expected to be completed in Q4.

This chart from Colliers International shows that CBD Grade A vacancy was flat in Q3 as it rose only by 0.1ppt QoQ to 5.6%.

The firm believes that CBD Grade A supply pipeline will taper down over 2019-2021, with new supply averaging 0.57 million sq feet (53,000 sq metres), or 2% of stock per annum, in contrast to the large supply injection in 2017 (approximately 10% of stock).

Also read: Average office market rents rose 0.9% to $9.05 in Q3

“The supply shortfall over 2019-2021 should keep CBD Grade A vacancy tight, below the 10-year average of 6.2%, even after accounting for the impact of slowing net absorption in 2020 and 2021 in accordance with consensus forecasts of a global economic dampening,” Colliers International explained.

The firm also thinks that only the 18 Robinson office tower in Raffles Place which is about 136,000 sq ft will be the only building completed in Q4.