Core CBD Premium, Grade A office rents grow by 0.5% QoQ

The vacancy rate for these offices increased to 2.9%.

The average rent for core CBD Premium and Grade A offices grew 0.5% to $11.46 per square metre in the first quarter, slowing slightly from a 0.6% gain in the last quarter of 2022, Colliers reported.

The core CBD Grade A office submarket drove the average rent growth as it held up on low vacancies, limited upcoming supply, and encouraged pre-commitment rates.

But, Colliers expects that it will likely deaccelerate as demand weakens with slower global economic growth.

READ MORE: Core CBD Grade A office rents went up 0.4% QoQ in Q1 23

Meanwhile, the average vacancy rate for core CBD Premium and Grade A offices rose to 2.9% in the first quarter due to weakening demand, with offices in Shenton Way/Tanjong Pagar having the highest with 5.0%, followed by Raffles Place/New Downtown at 4.1%

However, net absorption was negative at 113,000 square feet in the same quarter and could weaken further with softer macroeconomic conditions.

Looking ahead, Colliers expects a 2% to 3% ease in rental growth for the rest of the year.