Office rents in Singapore half that of Hong Kong's

Singapore's prime office rents are becoming more competitive.

Rents in the Central Business District (CBD) here last year came in at only half those in Hong Kong, which has the Asia-Pacific's highest rents at HK$104.47 per square foot (S$16.66 psf).

The rental rates in Singapore, ranked 14th in the Asia-Pacific, were $8.61 psf last year; the Republic was the 11th in 2011.


Globally, rents in Hong Kong last year were second only to those in London; Tokyo fell from third to fifth.

Commercial rents here are kept low relative to, say, Hong Kong's, by the government's push to decentralise business activities beyond the CBD; this tempers leasing activity and leaves more vacancies in super-grade A spaces, thus moderating rents.

Last month, for instance, the Ministry of National Development said it plans to provide at least 13 million sq m of commercial space outside the city by 2030, thus spreading out commercial activity to the regional hubs.

Singapore's rents fell 16 per cent year-on-year; this trend was mirrored in regional financial centres such as Hong Kong, where the fall was 26 per cent, and Tokyo, down 11 per cent.

Singapore rents are expected to bottom out, and then to start rising late this year and early next year, buoyed by robust demand.

Although prime office rents in Asia's regional financial centres such as Singapore, Hong Kong and Tokyo fell, they inched up 3 per cent over the year Asia-wide on slower economic growth.

Beijing dropped one place to seventh in the global ranking as rents stayed unchanged over the last 12 months; New Delhi rose one rank to fourth on the back of a 25-per-cent jump in prime rents.

Globally, prime rents rose 3 per cent last year despite economic uncertainty, but this increase was largely driven by impressive growth in South America, particularly Brazil and Colombia.

Source: Business Times –21 February 2013