Office market sees net absorption of 307,282 sq ft in Q1

This marks the third consecutive quarter of positive net demand for the market.

The office market continued its streak of positive net demand for the third consecutive quarter, recording net absorption of 307,282 square feet in the first quarter (Q1) of 2022.

The average vacancy rate has likewise continued to decrease to 5.8% from 6.3% in the fourth quarter of 2021, according to data from CBRE.

For Core CBD (Grade A) office spaces, rents were up by 1.4% quarter-on-quarter (QoQ) to $10.95 per square foot per month, whilst vacancy stabilised at 4.5%. Grade B, meanwhile, has been seeing recovery with rents growing 1.4% QoQ and vacancies declining across the board.

According to CBRE, leasing transactions for the quarter were from existing occupiers and new market entrants, with non-bank financial institutions and technology companies still being the key demand drivers for office spaces.

Looking ahead, CBRE said the office sector will benefit from the easing of workplace measures.

“Rental growth should gain momentum in the coming quarters,” CBRE said adding that Core CBD (Grade A) rents will likely grow by 6.9% year-on-year for the whole of 2022.