Vacancy rates in Melbourne's central business district has dropped by almost 20 percent compared to rates in January amidst new office development according to research from Savills International.

It was found that only 89 full floors were vacant for lease in grade A buildings from 108 floors in January while vacant prime grade full floors decreased to 42 floors from 60 floors. The robust demand comes at a time when office construction in the business district has been the highest in years.

It was estimated that prior to the Global Financial Crisis there was 1,013,000 square meters of office developments built contrivuting to 465,000 square meters to the business district.

Savills' associate director of research, Claire Cupitt, said options for full and multiple-floor tenants in the district were becoming limited and with tenant demand expected to strengthen, the options would decline further.

''The level of inquiry for office space has increased 300 percent on the previous six-month period, with more than 200,000 square meters of inquiry on Savills' books,'' she said. ''Despite the record level of construction up to the GFC, space remains tight. In fact, current vacancy is at 6 percent and falling.''

Businesses with bigger space needs had to resort to the pre-commitment market. Another Savills report found that there was a huge change in net absorption rate in Melbourne's business district from a negative 43,765 square meters during in the second half of last year to a positive 34,021 square meters during the first six months of 2010.