Office rents in Hong Kong and Singapore are set to fall, brokers say, as their markets start to reflect the slowdown in trade and investment caused by the euro zone debt crisis.
In a mid-quarter review released yesterday, Jones Lang LaSalle forecast Grade A rents in Hong Kong to fall 5 to 6 per cent in the fourth quarter to US$1,643 (S$2,107) per sq m per year and 4 per cent in Singapore to US$786 per sq m per year.
It would mark a fall into the red for Singapore rents, which rose 0.6 per cent in the third quarter and the intensification of a decline in Hong Kong, where rents fell 0.9 per cent in the third quarter.
According to Colliers International, Hong Kong has the most expensive property rents in the world. However, multinationals are reassessing their needs for next year and Mr Simon Lo, executive director of research and advisory at Colliers, forecasts an 8 per cent decline in Hong Kong office rents in 12 months to September next year.
Singapore may now be easier for investors to access as an office market because buildings are coming to market, whereas office stock in Hong Kong’s Central district is held by a handful of landlords that do not typically sell.
Source : Today – 8 Dec 2011