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SG S'pore prime office rents fall 16.3%

Property Here - Tuesday, June 25, 2013

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Rental prices of prime office space in Singapore fell the most anywhere in the world during the 12 months ending March 2013, according to new data from CBRE.

Although Asia dominates the list of most expensive office locations, the price of prime Grade A office space in the city-state dropped 16.3 percent as a result of an increase in supply and increased availability at the lower end of the market. CBRE noted that the bulk of the rental decline occurred in early 2012, with only minimal rental corrections in the second half of 2012 and in Q1 2013.

Asia is home to the world’s most expensive office locations as Hong Kong-Central remained the highest priced market, and four other Asian markets populated the top five, according to CBRE Global Research and Consulting’s semi-annual Prime Office Occupancy Costs survey.

Hong Kong–Central’s overall occupancy costs of US$235.23 per sq. ft. per year topped the “most expensive” list for the third consecutive time. London’s West End followed with total occupancy costs of US$222.58. Beijing’s Finance Street, Beijing’s Jianguomen central business district and New Delhi’s Connaught Place central business district rounded out the top five.

Other Asia-Pacific markets in the top ten include Hong Kong-West Kowloon (6th) and Tokyo (Marunouchi/Otemachi) (8th). New York’s Midtown Manhattan (10th) returned to the top ten markets for the first time since early 2012, joined by Moscow (7th) and London’s City (9th). Singapore was ranked 19th globally.

“While the pace of occupancy cost growth globally has slowed, limited supply of prime space in key core business centres has fuelled continuous upward movement of occupancy costs,” said Dr. Raymond Torto, CBRE’s Global Chief Economist. 

“The most expensive office markets often attract the regional headquarters of large multinational firms that require a prime location in a prestigious building with access to major global and regional transit routes.”

CBRE tracks occupancy costs for prime office space in 127 markets around the globe. Of the top 50 “most expensive” markets, 21 are in Asia-Pacific, 18 are in EMEA and 11 in the Americas.

While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and are not influenced by currency changes.

Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email