Feb. 21 – While the price of Hong Kong office rentals fell last year, its main competitor for Asian focused business, Singapore, is still 52 percent less expensive in the same market. Singapore is increasingly important as a link to both the other ASEAN countries and India, with prices expected to rise starting early this year.
Real estate firm Cushman & Wakefield reported that Hong Kong rentals averaged SG$16.66 per square foot compared with Singapore’s SG$8.61. Hong Kong office rentals fell 24 percent in price per square feet in the last 12 months, yet rent prices are still second only to London in price. Singapore ranks globally as the 14th most expensive office rental market, after falling 16 percent year on year.
“Singapore’s rent ranking globally and regionally slipped in 2012, which is emblematic of conditions in other financial centers in the region. The combination of below-trend leasing activity and relatively elevated vacancies in super-Grade A space have kept rents on a downtrend over the past year, and among the lowest compared to other financial centers including Hong Kong, Tokyo, Sydney and Shanghai,” said Sigrid Zialcita, Managing Director of Cushman and Wakefield’s research team.
“But we see more underlying strength in leasing activity this year on account of overall steady economic progress. For occupiers, this presents an opportunity to upgrade, relocate, renew or expand at favorable lease terms,” she further stated.
Hong Kong is increasingly positioned as the primary gateway to and from China. Singapore, on the other hand, with its ASEAN membership, enjoys better trading conditions as well as geographical proximity to the smaller Asian Tigers such as Vietnam, Indonesia, Malaysia, and India.
Cushman & Wakefield’s Country Manager for Singapore, Toby Dodd remarked that the window for signing contracts in the city may be closing.
“Now is still a good time for occupiers to secure long term lease agreements in Singapore, although these opportunities may decline as the year progresses.”
Hong Kong, Delhi, Tokyo and Beijing are respectively the top four most expensive cities for office rentals in Asia. On a global scale, Hong Kong is the second most expensive, Delhi is fourth, Tokyo is fifth while Beijing is seventh.
