Tightening vacancy and strong absorption drove rents up to $154.84 psf.
Prime office occupancy costs in Singapore climbed 17.3% YoY in Q1, marking the biggest jump in the Asia Pacific and the third biggest increase globally, next to rates in Porto, Portugal (24.7%), and Cape Town, South Africa (20.5%), according to a study by CBRE.
At an annual rate of $154.84 psf (US$114.28 psf) for prime office rents, the city jumped eight spots to land on the 14th of the world’s most expensive office market list.
“The strong year-on-year rental growth reflects Singapore’s robust office market fundamentals, underscored by tightening vacancy and strong absorption. Nonetheless, going forward, the rental growth is expected to ease on the back of economic headwinds as global uncertainties persist,” said Desmond Sim, CBRE head of research, Southeast Asia.
Aside from Singapore, Kowloon, Hong Kong (10.1%), Ho Chi Minh City (9.6%) and Hanoi (8.8%) in Vietnam are also amongst the top 20 fastest growing office rental markets.
“Asia Pacific is again recalibrating the global benchmark in prime office rents as demand and supply dynamics continue to prompt prices to hit new heights across core business districts. As corporations continue to look to attract and retain talent by securing office environments of the highest quality, we expect this momentum to carry over into 2020,” said Ada Choi, Head of Occupier Research, Asia Pacific, CBRE.
Hong Kong’s Central District is undefeated for the fourth straight year as the world’s most expensive market for prime office space at $436.30 psf (US$322 psf) annually. Rounding up the top five are London West End at $301.75 (US$222.70) psf, Kowloon, Hongkong at $282.74 (US$208.67) psf, Midtown Manhattan, New York at $266.78 (US$196.89) psf, and Beijing Finance Street at $254.42 (US$187.77) psf.
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