Singapore Office Rents May Surpass Hong Kong’s
SINGAPORE – Office rents in the city-state may exceed those in Hong Kong for the first time since 2009, indicating that Singapore is gaining a competitive edge over its rival Asian financial hub, reported Bloomberg on Monday (29 November, SGT)
In a Bloomberg Intelligence report, analysts Kristy Hung and Patrick Wong stated that average office spot rents here could increase by between 5 percent and 10 percent next year thanks to limited new stock of office space.
On the other hand, the prime office vacancy level in Hong Kong may surpass 12 percent by the end of 2022 following a significant increase of office supply in decentralized districts.
The diverging office market prospects is due to the effect of different pandemic management strategies adopted by Singapore and Hong Kong. Although the former is cautiously reopening and work-from-home (WFH) remains the default arrangement, it has stopped pursuing a zero Covid-19 strategy and has started relaxing border controls.
Conversely, Hong Kong remains closed off to the rest of the world and has stringent quarantine rules due to its zero Covid-19 strategy, which has been lambasted by multinational firms.
“With the zero COVID approach on Hong Kong’s part, multinational companies might continue to find challenges in hiring cross-border talent to its shores. That could have weakened the potential recovery trajectory in the occupier market,” said Christine Li, Research Head for Asia Pacific at Knight Frank in Singapore.
Aside from that, Singapore’s office property market is also benefiting from the “stay-at-home” industries, given the shift in tenant profile in recent years from financial services to technology. As for Hong Kong, it has been less competitive in luring new occupants due to its perceived high costs, she added.
