Dec 19, 2012
The Straits Times
The cost of taking up office space in Singapore fell 17.7 per cent as of Sept 30 from a year earlier, a new survey has found.
At US$104.66 (S$127.44) per sq ft on average, office occupancy costs here are the 19th-highest in the world, according to the twice-yearly Prime Office Occupancy Costs survey by consultancy CBRE.
Hong Kong's Central Business District is the most expensive worldwide, at US$246.30 psf on average, despite experiencing the largest decline in the world, of 17.8 per cent, from a year ago.
While the high prices are driven by limited new supply and tight market conditions, the fall came about as cost-cutting among large financial institutions dramatically lowered prime office occupancy costs in Hong Kong.
Mr Moray Armstrong, executive director of office services at CBRE, said: "Singapore's relative cost competitiveness puts it in a very advantageous position to attract a steady stream of key corporate occupiers, many of whom have decided to use Singapore as a base for their regional operations."
He said it may be premature to call a return to rental growth as next year feels like a fairly flat, steady year for the office market.
"That said, Singapore's office market rarely remains static and has always tended to surprise on the upside in recovery phases."
Six of the top 10 most expensive office markets are in Asian cities, CBRE's survey showed.
They include: New Delhi, Tokyo and a second Hong Kong district - West Kowloon. The other two are Beijing's Central Business District and its Finance Street.
CBRE tracks occupancy costs for prime office space in 133 markets worldwide. Costs increased in 74 markets, decreased in 37 and remained unchanged in 22.
Office occupancy costs in San Francisco accelerated the most this year, taking two spots out of the top five increases.
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