Growth in office occupancy costs to slow over next five years: DTZ

Over the next five years, the cost of occupying a workstation in Singapore’s business district will be among the slowest to grow globally, according to property services firm, DTZ.

Driven by downward pressure from negative rental growth in 2012 and 2013, Singapore joins Bangkok and Kuala Lumpur as locations that will see the lowest growth in office occupancy costs.

Factors that contribute to this projection include a large supply of new offices coming onto the market, and weakening economic sentiment.

“Total costs per workstation per annum in Singapore rose eight per cent year-on-year to US$11,220, but this was still less than half of that in Hong Kong, which at US$25,160 remains the most expensive location in the world, ahead of London and Geneva,” DTZ said.

In 2011, average occupancy costs per work station per annum in Asia Pacific grew 3.4 per cent. This is in contrast to a global average of just 0.3 per cent.

Occupiers in Chengdu saw the greatest savings as costs dropped 24 per cent.

Tier two cities in India and China continue to dominate the list of top 10 least expensive markets globally.

Surabaya in Indonesia remained the cheapest location at US$1,680, despite a seven per cent rise in cost.

Southeast Asian cities comprising Bangkok, Ho Chi Minh City, Jakarta and Kuala Lumpur were among the least expensive markets globally.

Beijing has emerged as the biggest mover over the next five years, shifting 13 places to enter the top 25 most expensive markets globally.

Despite expectations of falling costs in 2012, Hong Kong is forecast to remain the most expensive office location in the region in 2016, although the gap between Hong Kong and Tokyo is narrowing.

DTZ’s survey assesses the main components of occupancy costs in 124 business districts in 49 countries worldwide.

The accounting method includes rents and outgoings such as maintenance costs and property tax. It also takes into account variability of space utilisation standards by measuring costs on a per workstation basis rather than just per square metre.

Source : Channel NewsAsia – 15 Feb 2012

Join The Discussion

Compare listings