According to a DTZ report, global occupancy costs are expected to grow in 2011, with Asia Pacific to lead the way.
After Bengaluru and Hong Kong, Singapore is set to show the third-highest increase in global office occupancy costs over the next five years.
“The biggest increase in costs globally from 2011 to 2015 will be seen in the southern Indian IT centre of Bengaluru, Hong Kong, Singapore, Beijing and Chennai, underpinned by solid rental growth,” said Kate Medlicott, Associate Director, DTZ Forecasting and Strategy Research, and co-author of the report.
“However, the growth in costs of Bengaluru and Chennai is from a very low base and these markets will continue to offer value to occupiers,” she noted.
According to the DTZ's global ranking, Hong Kong was the most expensive office location per workstation in 2010, followed by London, Tokyo, Paris and New York.
In the Asia Pacific region, Singapore moved from eight place last year to sixth place this year, with prime office occupancy costs expecting to increase 6.43 percent yearly from 2011 until 2015.
“Like Hong Kong, Singapore's office market is also volatile, as demand surges and ebbs in tandem with economic activity,” said Chua Chor Hoon, Head of Southeast Asia Research at DTZ.
“Prime office occupancy cost in Singapore last year rose by a smaller percentage compared to Hong Kong as the increase in demand is being met by new supply coming from Marina Bay and the rest of the CBD.”
With Singapore’s prime office occupancy costs less than half of those in Hong Kong, Ms. Chua believed that the country will stay competitive, as multinational companies choose between Hong Kong and Singapore to establish headquarters in the region.
Source: Commercial Guru
