Singapore’s office rents see steepest Q2 drop in Asia Pacific

Office rents in Singapore fell 26.2 per cent in the second quarter, according to latest figures from real estate consultancy firm Colliers International. This was the steepest decline quarter-on-quarter among Asia-Pacific cities.

Singapore is the fourth most expensive office location after Tokyo, Hong Kong and Ho Chi Minh City for Grade A offices – one spot down from the first quarter this year.

Colliers expect office rents here to continue to fall over the next 12 months due to excess supply and subdued demand for office space amid the gloomy economy.

However, market watchers are seeing some positive signs from the widening gap between Singapore’s office rents and the more expensive cities in the region.

Tan Huey Ying, director of Research and Advisory of Colliers International, said: “With the outlook for all the other Asia-Pacific cities looking comparatively brighter than Singapore’s, Singapore is likely to continue to slip in the rankings of most expensive office rents in the Asia-Pacific region.

“The rental gap with the more expensive cities is expected to widen further, while the gap with the less costly cities is largely expected to narrow in the next 12 months, thereby improving Singapore’s competitive edge.”

The report, which records quarterly office performance across 26 cities in the Asia-Pacific region, sees Tokyo and Hong Kong remaining as the top two cities with the highest rental costs.

With office rents remaining weak in the region, only Guangzhou and Seoul saw rents increase by 1.1 per cent and 1.5 per cent respectively in the second quarter.

Source : Channel NewsAsia – 3 Aug 2009

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