Singapore office occupancy costs 7th highest worldwide: survey
September 9, 2008
GRADE A
office space in Singapore was the seventh most expensive in the world
in June this year, a survey has found.
The average
annual Grade A office gross rent here was US$125.06, according to the
study by Colliers International.
Cities that
were dearer included Hong Kong (US$213.68), London’s West End (US$207.42)
and Moscow (US$167.29).
Singapore
was the third most expensive location in the Asia-Pacific region, after
Hong Kong and Tokyo.
In its Global
Office Real Estate Review Midyear 2008, Colliers says average annual
Grade A office rent in Singapore soared to US$113.49 in December 2007,
from US$84.64 in June 2007.
In terms
of vacancy rates, Singapore at 7.5 per cent in June 2008 ranked 13th
in the Asia-Pacific, below the likes of Perth (0.3 per cent), Seoul
(0.7 per cent) and Brisbane (1.2 per cent).
While the
vacancy rate here rose marginally from 6.1 per cent in December 2007,
Collier’s director of research and advisory Tay Huey Ying said: ‘Singapore
registered a comparatively higher vacancy rate in the first six months
of this year. This was due in part to the government providing relief
to the supply shortage by leasing out some disused state properties
and selling several sites for transitional office use.’
Companies
appear to be increasingly receptive to alternative business locations
and premises, Ms Tay said.
‘Office
users, who have had to grapple with the frenzied pace of rental growth
experienced since mid- 2006, can heave a sigh of relief as rental growth
eased substantially in the first half of 2008 on the back of reduced
pressure on supply,’ she said.
In terms
of supply, Colliers said Singapore had 8.6 million sq ft of offices
under construction in June, putting it in 16th position below cities
like Dubai (42 million sq ft), Shanghai (41.6 million sq ft) and Guangzhou
(19.8 million sq ft).
Office investment
held up in the Asia-Pacific but was down in Europe and North America.
Global office
investment fell 60 per cent - or 41 per cent excluding portfolio sales
- in the first half of 2008 to $108 billion, from $268.6 billion a year
earlier.
But Japan
saw office transactions increase 103 per cent, followed by Hong Kong
(up 86 per cent) and Singapore (up 58 per cent). China registered a
drop of 16 per cent.
Capitalisation
rates / initial yield in Tokyo (Central Wards), Hong Kong and Singapore
were 3.9, 3.42 and 6.19 per cent respectively.
In Spain
and The Netherlands, office transactions increased 77 per cent and 14
per cent respectively, while in London they fell 64 per cent.
The US remained
the most active office investment sales market, even though volume dropped
69 per cent to US$28.6 billion.
Source :
Business Times - 9 Sep 2008
