Chart of the Day: Office vacancy predicted to take further slide

Island-wide vacancy dipped to 8.8%.

According to DBS, the office sector had held up better than we expected YTD with 1H13 rents remaining flat from end 2012, against earlier projection of a 5-10% annual drop this year.

Average office rents moved up 0.2% qoq in Q2, the first uptick in 14 quarters.

Here's more from DBS:

On the other hand, capital values rose a further 3.6% in 1H13, bringing total appreciation to 44% since 3Q09. 

Fringe office values did better in Q2 than in the Central area with capital values improving 6.3% in 1H13 vs a 3.9% rise for Central located assets.

The improvement was supported by 0.474msf of net absorption of office space while there was 22,000sf of net office stock taken out of circulation in 1H13.

Against this backdrop, island-wide vacancy dipped to 8.8% from 9.4% as at end Dec 2012. The entire Robinsons Tower and Annexe Building, IFS Building, Corporate Office, Cecil House and some floors of DBS Tower 1 have been vacated for redevelopment.