CBD Grade A office vacancies reach six-year high: Savills

This surge is due to the completion of IOI Central Boulevard Towers.

The vacancy rate for CBD Grade A offices in Q4 2024 increased by 1.8 percentage points (ppts) quarter-on-quarter (QoQ) to 8%, the highest level since Q1 2018, when it stood at 8.8%, according to Savills.

Savills attributed this rise to the addition of IOI Central Boulevard Towers to the office supply.sbr gra

All submarkets, except for Raffles Place, City Hall, and Orchard Road, saw quarterly increases in vacancy rates. The largest increase occurred in Marina Bay, where the vacancy rate surged by 7.6 ppts to 12%, following the completion of IOI Central Boulevard Towers.

Vacancy rates in other submarkets rose between 0.7 ppt and 0.9 ppt in Q4 2024.

Year-on-year, the vacancy rate for Grade A offices contracted by 1.5 ppts. Meanwhile, vacancy rates for Grade AA and Grade AAA offices increased by 1.8 ppts and 2.6 ppts, respectively.

In terms of rents, the average monthly rent for CBD Grade A offices continued to rise, increasing by 0.6% QoQ to $9.79 psf. On a YoY basis, office rents grew at a slightly slower pace of 1.1% in 2024, compared to 1.2% in 2023.

Rents for Grade AAA offices rose by 0.7% QoQ, a slight acceleration from the 0.6% increase in Q3 2024, reaching $12.91 psf—the highest since Q1 2020. On a YoY basis, rents for Grade AAA offices grew by 1.6%.

Most submarkets experienced quarterly rent increases, except for Orchard Road, where office rents remained unchanged for the fourth consecutive quarter. 

The largest growth was recorded in Marina Bay, where rents increased by 1% to $12.83 psf in Q4 2024. Rents in Raffles Place rose by 0.8% QoQ to $10.12 psf. Other submarkets saw quarterly rent increases between 0.4% and 0.7%.