SINGAPORE has dropped to 43rd place from 10th in DTZ’s latest ranking of office occupancy costs around the world, and is a cheaper place for businesses compared with other Asia-Pacific cities such as Tokyo and Hong Kong.
According to the property consultancy, annual occupancy costs per workstation in offices at Raffles Place fell 49 per cent, to US$8,440 in 2009 from US$16,610 in 2008. The slump ‘was triggered by weak demand and a substantial amount of new supply, which dragged down rents and thus total occupancy costs,’ DTZ said in a report.
London’s West End was the most expensive office location in 2009, up from fifth place in the previous year. Tokyo’s Central 5 Wards was ranked second, down from first. In third spot was Washington DC, which rose four places.
Hong Kong kept its fourth position even though annual occupancy costs per workstation there dropped 22 per cent to US$16,970 last year. It was the only other Asia-Pacific city apart from Tokyo to be within the top 10.
Other Asia Pacific cities ranked above Singapore include Sydney, Mumbai and Brisbane.
DTZ expects Hong Kong to ’strongly outpace’ Tokyo by 2013. Its annual occupancy costs per workstation could rise to US$23,800 then, exceeding Tokyo’s US$21,160.
The consultancy estimates that annual occupancy costs per workstation in Singapore could slide another 17 per cent to US$7,020 this year. They might start climbing to reach US$7,840 in 2013, but are unlikely to surpass 2009 levels. ‘This is driven by surplus space driving down rents in the near term,’ it said.
DTZ added that companies in Singapore are set to benefit not just from low occupation costs. There will be ‘a wider and better pool of properties to choose from – the office market will offer tenants real value for money in the current climate’.
Source: Business Times, 23 Jan 2010