CBD Grade A office rents grew 0.5% QoQ after 5 quarters of decline

Net demand remains positive albeit at weak levels.

CBD grade A rents returned to growth at 0.5% quarter-on-quarter (QoQ), reaching $9.60 per square foot per month in the second quarter (Q2) of 2021 after five consecutive quarters of decline, according to a report by Cushman & Wakefield.

The report said CBD grade A net demand stayed positive for a second consecutive quarter, albeit at very weak levels.

Net demand was positive at 17,000 square feet (sf) in Q2 2021 and 51,000 sf in Q1 2021. Nonetheless, vacancy rates for CBD grade A continued to climb to 4.6% in Q2 2021, up 0.4 percentage points from the first quarter of 2021 as net supply grew faster than net demand. 

According to Cushman & Wakefield, the key drivers of net supply growth are the completion of Afro Asia i-Mark and the addition of Lazada One to C&W’s grade A basket. Outside CBD, rents in Suburban (all grades) rose by 0.2% QoQ amid lower vacancy rates. Meanwhile, all grade rents in the City Fringe fell by 0.5% QoQ, dragged lower by non-grade A buildings.