Wednesday, January 03, 2007
[RealEdge] BT : S'pore office cost up 65% in 2006
| Published January 3, 2007  | ||||||||
| S'pore office cost up 65% in 2006 That's the highest increase among 134 locations worldwide: DTZ survey
By VINCENT WEE
THE cost of having an office in Singapore notched up the highest increase among all 134 locations covered in the latest DTZ Debenham Tie Leung annual Global Office Occupancy Costs survey.
The 65 per cent jump to US$7,860 per work station per annum took the republic up to 55th position globally from 96th position last year, and put it among the top ten in the Asia Pacific. However it is still comfortably behind other top Asian locations like Hong Kong, which is the second most expensive in the world at US$19,730, and Tokyo's five central wards which take the eighth spot at US$13,470. Also more expensive than Singapore are Seoul (at 12th position), Mumbai (18th), Sydney (41st), and New Delhi (51st). 'Despite the hike, occupancy costs in Singapore remain less expensive compared to locations such as Hong Kong and Tokyo,' said Angela Tan, DTZ Southeast Asia's executive director and regional head, global corporate services. Within the Asia Pacific, Hong Kong retained its top ranking from last year for occupancy cost, while Tokyo, Seoul and Mumbai maintained second, third and fourth positions. Singapore's sharp rise however bumped it up to ninth position, ahead of China's Beijing and Shanghai. DTZ attributed the increase to the recent wave of financial institutions and other businesses setting up new global offices or expanding operations here. These have created higher demand and with new supply remaining insignificant till 2010, further rises in occupancy rates and cost can be expected, DTZ added in its report. 'With the very limited new supply until 2010, occupiers are finding it very difficult to secure office space, especially Grade A space in the CBD,' said Ms Tan. As a result, those not in the finance, insurance, real estate or business service sectors are increasingly exploring alternative locations outside the CBD, she added. The shortage of office space is reflected in much of the Asia-Pacific market as well. Strong demand continued to be seen from the banking, financial services, insurance and IT/IT-enabled services sectors, the report said. It added that some companies faced with the prospect of higher costs are considering relocating to secondary buildings in good locations or on the fringe of central areas with good access to major transport routes. The report also suggested that rising occupancy cost is a global phenomenon with 102 locations - or about three quarters of the markets surveyed - posting rises. Prime office locations in the US in particular accounted for the greatest number of cost increases, including those which in the previous year had stayed flat like Denver. At the opposite end of the spectrum, the least expensive locations were also found mostly in Asia, with Surabaya and Manila at the bottom of the global list. | ||||||||
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