Singapore office spaces rank third most expensive in Asia Pacific
Average monthly gross rents for CBD Grade A office locations average to SG$8.55 per sq ft per month.
According to Colliers International's "Asia Pacific Office Market Overview," Singapore remains the third most expensive office location in Asia Pacific in 1Q 2012 – a position the country has maintained since 3Q 2009.
Singapore ranks in the top 3 most expensive office locations in Asia Pacific along with Hong Kong and Tokyo for 1Q 2012.
While Singapore has maintained its third position since 3Q 2009, it has also maintained the competitive edge in office occupation cost over the other two countries.
Here's more from the report by Colliers International:
Lingering sovereign debt issues in the Euro zone and continued economic uncertainties in key economies around the world have continued to weigh on office leasing activities in Singapore.
In local currency terms, average monthly gross rents for CBD Grade A office space in Singapore fell by a deeper 4.3% quarter-on-quarter in 1Q 2012, from -1.6% QoQ in 4Q 2011 – bringing average CBD Grade A office rents to S$8.55 per sq ft per month as of end-March 2012.
However, due to a further weakening of the US Dollar against the Singapore Dollar during this period, rents of Singapore’s CBD Grade A office space in US Dollar terms edged down a mere 1% QoQ – from US$82.42 per sq ft per year in 4Q 2011 to US$81.59 per sq ft per year in 1Q 2012. This is a slight improvement from the -1.7% slide in rents in the preceding three-month period.
Outlook: Singapore office rents expected to stay soft amid opposing supply and demand trends
Going forward, supply and demand of office space for lease is likely to continue on the opposing paths.
Available space for lease is expected to grow, on the back of an emerging two-tier space market. The first is the long pipeline of new office completions offered by various landlords. The second is an expected increase in shadow space available for sublease or assignment by tenants if the economy stays in the doldrums. The accumulation of these factors would continue to drag down rents.
Meanwhile, the uncertain economic outlook will continue to put businesses on guard and weigh down occupier demand.
Nevertheless, some industries – such as the mining and gas, private banking, equity investment and information & communications services sectors, which have remained optimistic and maintained their expansionary mode in spite of the economic uncertainty – will provide some support to demand.
In addition, supported by companies’ desire to maintain a presence in Singapore as Asia is the current growth region, the fall in office rents is expected to be capped at 15% for the whole of 2012 compared to the previous downturn, when office rents plunged 20-50% in 2009 alone.