Occupancy rate of Premium, Grade A office in the CBD dipped to 93.5%

Despite robust rental growth.

According to Colliers International, occupancy rates softened during the quarter, despite the healthy rental growth.

The average occupancy rate of Premium and Grade A office space in the CBD eased 1.7 percentage point to 93.5 per cent in 3Q 2013, down from a 4½-year high of 95.2 per cent in 2Q 2013.

The fall was led by a 6.5-percentage point drop in occupancy rate in the Premium Grade office space in the Raffles Place/New Downtown micro-market to 87 per cent in 3Q 2013. Similarly, the average occupancy rate of Grade A office space in the City Fringe micro-market also fell 3.5 percentage point to a 4-year low of 95.6 per cent during the quarter.

Mr Marcus Loo, Executive Director of Office Services at Colliers International,, “The fall in occupancy rates across several micro-markets was due to an influx of new office completions, rather than an overall contraction in demand; which also explains why rents were not adversely impacted.

The quarter saw the completion of Asia Square Tower 2 in the Raffles Place/New Downtown micromarket which brought onto the market some 733,000 sq ft of space, as well as The Metropolis in the City Fringe micro-market which has some 1 million sq ft of space.”