Prime CBD offices grapple with massive decentralisation wave

More firms are moving to cheaper locations.

Occupancy rates in the Central Business District dipped by 0.6 percentage points in the second quarter as more firms decentralise.

According to Colliers, more firms are relocating from their expensive CBD offices to cut down on costs.

"The continued wave of decentralisation contributed to the dent in the overall occupancy rate of Grade A office space in the CBD. The availability of new office buildings outside the CBD, such as Westgate Tower, which has comparable building specifications but more affordable than Grade A office space in the CBD, was a draw for tenants’ decentralisation move during the quarter," said Calvin Yeo, Deputy Managing Director of Colliers International.

Recent examples of tenants who will be relocating from the CBD to Westgate Tower include Germany’s automotive firm, Daimler Group and mechanical engineering services firm, Beca. They follow suit after tenants, such as the Agri-Food and Veterinary Authority (AVA) and the Building and Construction Authority (BCA), moved from the MND Complex at Maxwell Road to Jem at Jurong Gateway Road.

In the near future, the Ministry of National Development (MND) has plans to move from the MND Complex to JEM and the CPF Board will be moving from 79 Robinson Road to Novena Square along Thomson Road.

Cost-conscious companies that do not require a CBD front office are also making plans to move out of the area to reduce their occupancy costs, amid the uncertain economic environment.