By Romesh Navaratnarajah: Office rents in Singapore's central business district are around 52 percent lower than Hong Kong's giving the city-state a competitive edge over its more expensive rival, according to a report from Cushman & Wakefield.
"Singapore's rent ranking globally and regionally slipped in 2012, which is emblematic of conditions in other financial centres in the region," said Sigrid Zialcita, Research Head for Cushman & Wakefield in the Asia Pacific.
"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 centres including Hong Kong, Tokyo, Sydney and Shanghai."
But while Singapore's rents are only S$8.61 psf compared to Hong Kong's HK$104.47 psf (S$16.66 psf), they are increasingly competitive for the region. Meanwhile, rents dipped 16 percent year-on-year and are expected to bottom out this year, with increases likely in late-2013 or early-2014. The lower rents work to the city's advantage as Singapore is well-positioned to become Asia's hub for regional and global companies.
"Now is still a good time for occupiers to secure long term lease agreements in Singapore, although these opportunities may decline as the year progresses," noted Toby Dodd, Country Manager for Cushman & Wakefield Singapore.
"Rents have reached the bottom of the cycle and will remain steady given strong supply pipeline of new buildings, including Asia Square Tower 2 and CapitaGreen, while other Grade A space returns to the market at buildings such as One Raffles Quay and Capital Tower as tenants realise their decentralisation strategies." Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email email@example.com Related Stories: Japan office investments rebound
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