20 February 2013 1953 hrs
SINGAPORE : Office rents in Singapore's Central Business District (CBD) are about 52 percent cheaper than Hong Kong's last year.
According to the Office Space Across the World 2013 report by Cushman & Wakefield, Singapore rents fell 16 percent year-on-year.
The property consultancy firm expects rentals to bottom out in 2013 and forecast increases in late 2013 or early 2014.
Sigrid Zialcita, Managing Director for Cushman & Wakefield's Research team in Asia Pacific said, "Singapore's rent ranking globally and regionally slipped in 2012, which is emblematic of conditions in other financial centres 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 centres including Hong Kong, Tokyo, Sydney and Shanghai."
Meanwhile, Singapore rents are becoming increasingly competitive in the region.
Current going rates in the city state are about S$8.61 per square foot, compared to Hong Kong rents priced at S$16.66 per square foot.
The Singapore government says it plans to help keep CBD rents competitive by decentralising business activities to other commercial areas outside the CBD.
Cushman & Wakefield expects rents to remain steady - thanks to a strong supply pipeline with demand remaining robust.
Toby Dodd, Country Manager, Cushman & Wakefield, Singapore said, "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. 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."
According to the report, London has overtaken Hong Kong to take the title of world's priciest office market, followed by a surprise, fast-rising third place Rio de Janeiro.
Relatively scarce quality space in London has fuelled competition and driven up office rents, particularly in the West End.
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