Singapore was still the third most expensive city for office space in Asia Pacific in the fourth quarter of 2010, said Colliers International in its Q4 office market report.
Singapore was about 30 percent cheaper than Hong Kong in terms of office occupancy costs.
The average gross rent for Grade A office space in Singapore’s Central Business District (CBD) climbed 7.5 percent quarter-on-quarter to S$7.91 psf per month in Q4, taking the full-year growth last year to 24.5 percent, said Colliers.
However, Singapore’s office occupancy costs were not the highest in the region; Tokyo took the top spot with an annual gross rent of US$105.09 psf.
Hong Kong came in second with USS105.05 psf, while Singapore occupied the third spot with US$73.69 psf.
The rental gap between the top two cities narrowed in Q4, said Colliers.
Rentals in Tokyo continued to decrease at a gradual pace and could be pressured in 2011, due to the completion of a large supply of new buildings.
On the contrary, Hong Kong rents had increased, with average Grade A office rents as of November registering a quarter-on-quarter increase of 8.5 percent, in term of the Hong Kong dollar.
Hong Kong continued to see strong overall leasing demand, “thanks to the sustained expansionary demand attributed to existing financial tenants and new demand from a number of private equity and overseas legal firms”, said Colliers.
Office occupancy costs in Singapore were nearly 30 percent lower than that of Hong Kong. Thus, Singapore “maintains its competitiveness against its closest rival”.
Singapore prime office rents could see a 15 to 20 percent growth this year, even with 2.1 million sq ft of space coming into the market, said Colliers.
“The supply situation remains healthy, since about 50 percent of the new space has been pre-committed,” it said.
Source: Commercial Guru
