Vacancy rate for CBD Grade A offices dipped to 4.5%

Lowest in 2 years since 3Q11.

According to Savills basket, the net absorption of CBD Grade A offices remained in positive territory with a total of 220,000 sq ft in Q2/2013.

Combined with the conversion of about 176,400 sq ft of office space in 6 Shenton Way Tower 1 to serviced residences, the vacancy rate for CBD Grade A offices fell 1.5 percentage points (ppts) to 4.5% by the end of June. This is the lowest level in two years since Q3/2011.

Here's more from Savills:

By location, the vacancy rate in the Shenton Way area showed the biggest drop of 5.5 ppts from a quarter ago, remaining at 7.4% by the end Q2/2013, as the space vacated by DBS Bank has been steadily absorbed.

The improvement in occupancy is also attributed to the conversion of some office space in 6 Shenton Way Towers to retail premises and serviced apartments.

Vacancy rates in other micro-markets remained low, although those in Beach Road/Middle Road, Orchard Road and Tanjong Pagar rose slightly in the reviewed quarter.

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