Singapore will likely see the strongest rental growth of Grade A office spaces among mature markets in the Asia Pacific (APAC) region aside from Japan, according to Cushman & Wakefield.
This bullish forecast is partly supported by Singapore’s rental performance this year, with prime rents rising at the fastest pace among mature markets in APAC.
“Prime rents are now at their highest in three years, and in comparison to other cities across Asia Pacific, Singapore is now the second most expensive, next to Hong Kong’s Greater Central,” said the consultancy.
12 months ago, rents of prime office space in Singapore were 30 to 40 percent lower than those in Hong Kong, but now the price gap has shrank to 25 percent.
Moreover, the city-state had the second highest monthly occupancy cost of US$8.06 per sq ft for Grade A office space in APAC in Q3 2014. Hong Kong topped the list with US$10.77 per sq ft, while New Delhi clinched the third spot at US$7.26 per sq ft.
At the same time, Singapore had the third lowest vacancy rate of 3.6 percent in the region, behind Manila (3.43 percent) and Tokyo (2.8 percent).
Elsewhere in the region, many emerging markets are forecasted to experience above-average rental growth, while those in China are expected to stabilise or grow moderately.
In Japan, Tokyo’s office market is being propelled by strong corporate profits, while tech companies in India continue to dominate the sector. “Singapore is also benefitting from tech growth, as it tends to be the next destination, along with the Philippines, after India for multi-nationals,” said Cushman & Wakefield in its 2015-2016 Global Office Forecast.
Looking ahead, the office space market of Asia Pacific is expected to pick up in 2015, said C&W’s Research Head for the Americas, Maria T. Sicola.
“Most core markets will boast relatively low vacancies through 2015 and 2016, with the exception of cities in Australia, and some emerging markets in China and India,” she added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email email@example.com