Are high property costs stunting tech growth in Singapore?

Singapore has the highest average annual asking office rent at US$104 psf.

Singapore has emerged as a “powerhouse” market for global tech talent, CBRE reported.

In its Global Tech Talent Guidebook, CBRE said Singapore’s tech employment has grown by around 5% between 2019 and 2023. 

Based on the latest available data, the number of persons working in tech talent occupations in Singapore is estimated to be around 200,000 to 300,000.

The percentage of tech hires in the country's total employment hovers around 30%.

Apart from having a large tech talent pool, what makes Singapore a “powerhouse” are its mature tech ecosystem, stable regulatory environment, and access to capital.

In 2023, Singapore accounted for 5.5% of global VC tech funding and recorded around 400 VC deals with a value of around US$20b.

Of the VC deals secured in 2023, 81 are in the artificial intelligence (AI) space. 

All these factors play into real estate and location decisions of tech companies around the world, said CBRE.

“Tech companies are drawn to large talent pools, the premier education and research institutions, establish capital funding networks, amenity-rich cities like Singapore,” CBRE said.

In hubs like Singapore, however, tech companies face relatively high talent and property costs.

In Singapore, the average base salary of a software engineer is around US$100,000.

Singapore also has the highest average annual asking office rent at US$104 per square foot (psf).

“As a result, smaller markets have seen increased tech industry activity and Investment,” CBRE commented.

CBRE, however, underscored that for many companies, the primary consideration for location decisions is the availability of skilled labour.