AsiaOne
Wednesday, Feb 20, 2013
SINGAPORE - Prime central business district office rental rates have dipped 16 per cent in Singapore, registering at 51.68 per cent lower than Hong Kong's office rental rates this year.
A study by real estate firm Cushman and Wakefield found Singapore had a competitive edge over Hong Kong, which now ranks second on its list of most expensive locations for office rentals.
Singapore's rates averaged at S$8.61 per sq ft, while Hong Kong's registered at S$16.66 per sq ft.
At first place is London, with a rental cost of $323 per sq ft per year.
Despite dips in prime rents over the year, the Singapore market remained active over the year.
The government's plans to move commercial activities around the island and decentralise business activities to other commercial centres have helped the promotion and development of new centres of business. This will keep office spaces more affordable.
Sigrid Zialcita, Managing Director for Cushman and Wakefield's Research team in Asia Pacific stated: "Singapore's rent ranking globally and regionally slipped in 2012, which is emblematic of conditions in other financial centers in the region. The combination of below-trend leasing activity and relatively elevated vacancies in super-Grade A space have kept rents on a downtrend over the past year, and among the lowest compared to other financial centers including Hong Kong, Tokyo, Sydney and Shanghai."
For occupiers, this presents an opportunity to upgrade relocate, renew or expand at favourable lease terms.
The decrease in Singapore office rents works to the city's advantage making Singapore well placed to become Asian hub for global and regional companies, the real estate firm said.
Singapore rents are unlikely to fall further this year, the firm said.
Overall, regional prime space rentals were affected by slower economic growth, rising by just 3 per cent over the year.
Despite deceleration in prime rents in both Hong Kong and Tokyo, the two cities ranked 2nd and 5th respectively in the world's most expensive office locations.
Beijing, which previously experienced two years of prime rental growth, dropped one place to 7th in the global ranking as rents remained unchanged from the previous year.
