Office Rents in Singapore and HK to Lead Region: DTZ

Real estate consultancy DTZ Debenham Tie Leung said Singapore and Hong Kong are expected to record the highest growth in prime office rents in Asia over the next five years due to a lack of supply of new office space.C Y Leung, chairman of DTZ Debenham Tie Leung, the Asian arm of the global real estate consultancy DTZ, said Hong Kong grade A office rents will likely rise 70 percent between now and 2010, followed by Singapore with 69 percent.This works out to annualised growth rates of about 10 to 11 percent per annum, he said at a panel discussion during the Forbes Global CEO conference in Singapore.

The largest rental hikes are likely to be seen in the next 24 months, he said.

Lippo Group chief executive James Riady, who was also on the panel, said he was especially bullish about Singapore’s prime office market as capital values are currently only around half the S$2,300 per square foot of built-up space peak seen prior to the Asian financial crisis.

Leung said it was not easy for companies to “strategise against rental hikes” due to the relatively short leases in Asia of two-three years and high setting-up costs.

The solution, he said, is to use office space more productively, such as by getting staff to share workspace.

Source: Channel NewsAsia, 04 September 2006 

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