Singapore (PRWEB) February 25, 2013
Office spaces in Singapore’s central business district (CBD) are approximately 51.7% cheaper than Hong Kong’s, a recent Cushman & Wakefield’s “Office Space across the World 2013” report has shown.
According to the report, commercial rents in the city-state are significantly more competitive than its regional rival Hong Kong. Specifically, in 2012, rental costs in the Singapore CBD averaged S$8.61 psf, cheaper by about half compared to Hong Kong’s average of S$16.66 psf.
Moreover, the study revealed that Singapore’s rental rates lowered by about 16% year-on-year. Among the world’s priciest office spaces, the city-state slipped to 14th place in 2012, down 3 places from 11th in the preceding year. Meanwhile, Hong Kong’s rates are ranked as the most expensive in the region, and second only to London globally.
Analysis from Singapore company registration consultancy AsiaBiz Services indicates that the downtrend is due, in large part, to the government’s efforts to decentralize business activities, spreading out the operations of Singapore-incorporated companies beyond the city centre.
The availability of office spaces in non-central business hubs such as the Changi Business Park and the Mapletree Business City in Alexandra, for example, has lowered the demand for grade-A spaces in the CBD and consequently moderated the rental rates.
In January, the Ministry of National Development announced plans to further develop at least 13 million sqm of commercial space outside the CBD by 2030. The proposed commercial developments include the creation of the North Coast Innovation Corridor, as well as the expansion of existing hubs Changi Business Park, Tampines Regional Centre, and the Lorong Halus area.
Commenting on the report, AsiaBiz Services Head of Taxation Mr James Nuben said, “The tempering of rental rates bodes well for businesses who have, of late, struggled against the inflationary impact of restructuring. With the announcement, I am confident that the demand for the incorporation of Singapore companies will return.”
“In addition, the report is a revelation to investors who intend to sink their roots in the region. Both Singapore and Hong Kong offer benefits to foreign investors, but evidently, Singapore is more attractive as a regional hub because of its competitive office rents, among other pull factors,” he said in conclusion.
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