S'pore office -- world's 16th most expensive

The Singapore office market is the 16th most expensive in the world - placing it in a more competitive spot compared with other Asia-Pacific financial centres like Hong Kong, Tokyo, Shanghai's Puxi and Beijing, according to CBRE's ranking of the world's 50 most expensive office markets.

Its Prime Office Occupancy Costs survey showed that tenants of such spaces here had to fork out rent, taxes and service charge amounting to a total of US$117.39 (S$147.43) per square foot (psf) per annum.

This remains lower than Hong Kong's Central, which became the most expensive location for companies with occupancy cost of US$248.83 psf per annum.
 
Singapore is also cheaper than other up-and-coming financial centres like Beijing and Shanghai's Puxi area.
 
CBRE's report looked at prime office space in 133 cities worldwide, with data based on occupancy costs per annum as of March 31 this year.
 
The last time it conducted the survey was in 2010. Then, Singapore was ranked 25th based on occupancy costs of US$67.56 psf per annum as at September 2010.
 
Said Moray Armstrong, executive director of office services at CBRE, of the latest study: "The relatively low ranking (of Singapore) may be a blessing.
 
With office rents expected to ease further going forward, the Singapore office market appears set to retain its cost competitive edge over many other financial centres and other regional cities."
 
"In periods of austerity, MNCs become even more sensitive to premises costs," he added.
Singapore has seen a huge supply of Grade A office space come onto the market, with 5.4 million square feet of space completed since the first quarter of 2010.
 
It also has a strong pipeline, with some 1.37 million sq ft of office space slated for completion this year, most of which will come from Marina Bay Financial Centre Tower 3, which was completed earlier in March.
 
Next year, about 2.8 million sq ft in new supply is slated for completion, from projects such as Asia Square Tower 2 and The Metropolis in Buona Vista.
 
"With more developments in the pipeline, the city has ample space to accommodate occupier space needs, whether driven by growth or upgrading.
 
There is every opportunity for Singapore to outperform many other global office locations as a focal point for investment, new headquarters set-up and expansion," said Mr Armstrong.
 
The CBRE study found that the Asia-Pacific accounted for six of the top 10 most expensive office markets worldwide. Overall, the region had 19 markets ranked in the top 50.
Beijing's Jianguomen-CBD saw the largest annual increase in occupancy costs worldwide with a 49.4 per cent jump, while Hong Kong's Central saw the biggest decrease, with occupancy costs falling 17.2 per cent.
 
"Despite its most-expensive ranking, Hong Kong experienced the largest annual decrease of all 133 markets tracked as margin pressures on global financial services firms have impacted its Central submarket in the last year, given its high exposure to such firms.
"Some of these firms have consolidated space requirements leading to increased availability in the core CBD," said CBRE.