Check out why there may be less Grade A offices available for rent

Occupancy rate climbed to the highest level in five quarters.

According to Colliers International, although Singapore’s office property market continued to writhe in the slowing global economy, the pull-back in Grade A office rents generally eased for the second consecutive quarter due largely to a widened source of occupier demand.

Here's more from Colliers International

In 3Q 2012, key concerns about the persisting Eurozone debt crisis, the faltering economic recovery of the United States (US) and the slowing growth momentum in Asia continued to weigh on business confidence.

This, in turn, suppressed leasing activities among large space occupiers, including major banks and financial institutions, as they remained cautious of the uncertain economic conditions.

Nonetheless, the challenging environment presented opportunities for tenants, who need to maintain their presence in business-friendly Singapore, to take flight to quality.

Additionally, an increasing number of foreign companies are eager to set up operations in Singapore to partake of Asia’s growth momentum and diversify from the Eurozone’s shrinking economy.

Therefore, a number of new and existing tenants took advantage of the softening rents to sniff out good deals in strategic locations in 3Q 2012. These companies range from the professional and legal services industries to the insurance, commodity, energy and private equity sectors.

Noticeably, the majority of take up in 3Q 2012 were of Grade A office spaces of less than 20,000 sq ft.

As a result, the average occupancy rate of Grade A offices in the CBD strengthened from 92.0% in 2Q 2012 to 93.1% in 3Q 2012, the highest level in five quarters.

Occupancy rates of micro-markets surrounding the Marina Bay area, namely the City Hall/Marina and Raffles Place/New Downtown micro-markets recorded the biggest jump, rising 2.6-percentage points and 1.7-percentage points, respectively, during the quarter.