Jan 06, 2015

    S'pore ranks 14th in office space cost

    OFFICE spaces here were the 14th most expensive in the world as at the third quarter of last year, according to CBRE Research's biannual Global Prime Office Occupancy Costs survey.

    At US$113 (S$151) per square foot (psf), Singapore's office spaces are relatively more affordable than others in Asia.

    Ranked second most expensive, Hong Kong Central's office space stood at US$251 psf, while Beijing's Finance Street and central business district (CBD), ranked third and fourth respectively, cost US$198 psf and US$189 psf.

    Asia alone accounted for seven of the top ten markets. Other Asian countries making the list were India (New Delhi's Connaught Place - CBD) and Japan (Tokyo's Marunouchi Otemachi).

    Topping the list was London's West End district, which recorded US$274 psf.

    "Notwithstanding Singapore's strong rental growth last year (up 14.7 per cent), the city's current office occupation cost does not appear out of step with comparable global business centres," said Moray Armstrong, executive director of CBRE's office services.

    But in terms of occupancy costs growth, Singapore was fifth, with a 16.5 per cent rise in occupancy cost from the first to third quarters of last year.

    Mr Armstrong said the Singapore office sector performed within expectations last year, with rental levels advancing off low prevailing vacancy rates.

    "Looking ahead, limited availability of office space will continue through 2015 with relief to occupiers only when the next wave of major new supply arrives in the second half of next year," he added.

    "In these circumstances, we anticipate further rental growth, particularly in the early part of the year. The pace of rental growth may slacken later in 2015 and going into 2016, as the impact of sizeable future supply becomes apparent."

    CBRE tracks occupancy costs for prime office space in 126 markets around the globe.