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Chart of the Day: Business park vacancy rate rises 11.9%
No thanks to tenants choosing to work closer to the CBD.
The past quarter was relatively muted for the business parks sector in Q2 2017.
According to CBRE Research, the island wide vacancy rose slightly by 0.3 percentage points to 11.9% due to quarterly net absorption of -73,320 sq. ft.
Meanwhile, leasing and enquiry activity has been slow in recent quarters with a noticeable dearth of large tenant movements.
"A trend of tenants exhibiting a preference for re centralising or locating closer to the CBD has dampened demand for business parks space," the research firm said.
It noted that this focus on re-centralisation has in part been due to firms’ acknowledgement that location is still a key feature to attract and compete effectively for talent.
At the same time, this has coincided with the increase in new office options within the CBD for tenants.
"Coupled with the rental down-cycle in the office sector which led the premium between office and business parks rents to narrow considerably; the value proposition of business parks as a cost-efficient alternative has weakened considerably," CBRE noted.
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