Office spaces in Singapore may very well be the next big thing in real estate investment as it quickly creeps up the ranks of Asia’s most expensive office spaces while keeping its mid-ranking spot as being cost-effective.
Hong Kong tops charts as the city with the most expensive office spaces in Asia
While real estate in Hong Kong is one of the highest in Asia, and possibly in the world, it comes as no surprise that office spaces here are the most expensive in Asia.
They have topped the list of the world’s priciest office spaces for the 4th year running.
Singapore has come in in a cool 10th spot, making office spaces here a worthy investment, but yet cost-effective enough for companies looking to expand into the region or for start-ups.
In Hong Kong, a premium office space in the Central district could easily cost US$338 psf. In Singapore, the same in the Central Business District (CBD) would cost about a third of the price at approximately US$108 psf.
There has been and will continue to be redevelopment in not only Singapore’s CBD, but also extending further out into the suburbs with regional business hubs such as the Jurong Lake District, North Coast Innovation Corridor, Paya Lebar Central and the Greater Southern Waterfront connecting the Marina South district all the way to Harbourfront.
These developments aim not only to bring jobs closer to home, to spread the workforce out more evenly and lighten the load on the CBD, but also office international companies the possibilities of setting up regional headquarters here.
Will cost-effectiveness of Singapore’s office spaces help draw investors?
The prices of Singapore’s office spaces have climbed up from the 14th spot last year to be the 10th most expensive in Asia.
However, they are still considered affordable in comparison to Hong Kong where office rents can come up to be 60% more expensive than that of Midtown New York.
Will this provide Singapore with the edge in attracting global brands and companies to set up shop here?
Singapore’s cosmopolitan status, high-quality standard of living and it being a global hub for multiple high-value industries places her in an extremely competitive position.
Recently, Nasdaq-listed medical tech firm Guardant Health and French energy company Engie have both announced plans to set up regional headquarters here. Technology and Banking and Finances are the top occupiers of premium office space globally.
The influx of new multinational companies may, in turn, boost the residential sales and rental sectors as well.
The office rental index for office spaces in the central region rose 2.5% over the last 3 months and grade A office rents have risen 11% this year. It is expected to rise a further 9% in 2019.