Office Rents in Singapore, Hong Kong Continue Slide

by CFO Innovation Asia Staff, 16 August 2012

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Office rents in Singapore continued to decline in 2Q 2012 on the back of an increasingly challenging global economic environment, says Colliers International in its survey, the Asia Pacific Office Market Overview.

However, cushioned by a better than expected economic performance in Singapore as well as the temporary relief from a hiatus of major new office completions for the rest of 2012, the rate of rental decline moderated.

The average monthly gross rents for CBD Grade A office space fell by 1.1% QoQ in 2Q 2012 to S$8.45 per sq ft as of end-June 2012, compared to a drop of 4.3% in 1Q 2012.

The decrease in Grade A office rents boded well for the market, as it improved Singapore’s competitive edge as a regional hub for business and companies had been able to secure office premises for cheaper rents. This pushed the overall CBD Grade A office occupancy rates up to 92.0% in 2Q 2012, from 90.9% in 1Q 2012.

Weighed down by the uncertainty in the Eurozone as well as a possible supply overhang, office rental decline in the CBD is expected to continue in 2H 2012. However, the pace of decrease will slow down as Singapore strengthens its position as a compelling regional business hub.

Improved tenant demand in Hong Kong

In Hong Kong, a number of private banks remained positive in expanding their businesses. Individual non-finance companies planned to carry out business expansion in 2Q 2012 regardless of the headwinds from the Eurozone.

On the back of improved tenant demand, the pace of the rent decline has tapered off. Grade A office rents edged down 0.7% QoQ in 2Q 2012, compared to a drop of 5.5% in 1Q 2012. Meanwhile, Grade A office rents in Central decreased 2.0% QoQ, compared to a drop of 8.9% in 1Q 2012.

The outlook for the Hong Kong Grade A office market has been brighter due to increased demand for small-to-medium size Grade A office units in Central. Overall Grade A office rents are projected to undergo a mild downward adjustment of 4% over the next 12 months.

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CFO Innovation Asia Staff

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Office rents in sinagpore

Submitted by Meeting Rooms on 28 September 2012 - 5:51pm

Office rents in sinagpore and hong kong are going down.The post gives an idea about it

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