Office occupancy in Singapore feared to skid to 89.6%

What could drive this drop?

According to DBS, within specifically the office component, 63% of 2013‘s new inventory has been absorbed through a combination of new take up from insurance, commodities, business services and legal sectors, as well as expansion and relocation demand from existing tenants.

Annualising net absorption in 1H13, they derive an annual demand of c1msf for the year.

Here's more from DBS:

Taking this into account, we reckon the islandwide office occupancy could trend down from the present 91.2% to 89.6%.

Completion of Asia Square 2 in Sep 2013 is likely to bring about tenant relocation and depressing occupancy of older buildings, thus stressing rents in the latter.