Chart of the Day: Vacancy rate in Raffles Place/Marina Bay area up to 7.5% in Q2
Net demand for Grade A office space was lower than the absorption level in 2011 as a result of the difficult economic environment.
Savills Research reported:
Compared with 2011, new supply of Grade A office space was relatively limited in the first half of 2012. Year-to-date, only about 343,000 sq ft from the newly-completed One Raffles Place Tower 2 came to the market at the end of Q2/2012. Net demand was also significantly lower than the absorption level seen last year as a result of the difficult economic environment.
According to Savills estimates, a total of about 345,000 sq ft of Grade A office space was taken-up in the first two quarters of 2012, marginally higher than net supply. Vacancy rates of overall Grade A offices dipped some 10 basis points to 6.7% in Q2/2012 from 6.8% at the end of 2011. The stock of vacant space stood at an estimated 1.68 million sq ft, of which almost 80% is located in the Raffles Place/Marina Bay and Shenton Way micro-markets.
As a result, the overall vacancy rate in the Raffles Place/Marina Bay area rose from 6.2% in Q1/2012 to 7.5% in Q2/2012, and Shenton Way recorded the highest vacancy rate among all the micro-markets, although it has eased to 11.1% in Q2 from 12.0% in the previous quarter. In contrast, the City Hall and Orchard Road areas enjoyed very high occupancy as vacancy rates fell to 2.3% and 2.7% respectively.