Office space demand in 4Q strongest in almost two years

Sub-urban spaces posted highest jump in occupancy rates.

Colliers International’s latest quarterly research report revealed that demand for office space in the final quarter of 2012 remained healthy – with new take up of prime office space largely supported by tenants taking first-mover advantage on flight to quality.

The encouraging performance is in response to the series of stimulating measures implemented across the globe – including quantitative easing, interest rate cuts and loosened banks’ reserve requirements, among others – to spur economic growth. Intermittent positive economic news released in 4Q 2012 had also contributed to the positive business sentiment, said Colliers.

Underpinned by a steady occupier demand, the average occupancy rate of Grade A offices in the Central Business District (CBD) further strengthened by one-percentage point from 93.1 per cent in 3Q 2012 to 94.1 per cent in 4Q 2012 – the highest level in almost two years. 

Notably, the sub-urban micro-market recorded the highest jump in occupancy rates during the quarter. The average Grade A office occupancy rates in the sub-urban micro-market rose 4.3 percentage points in 4Q 2012 to end the year at 95.6 per cent.