Singapore's office rents slid down in priciest list

But it offers cost advantage against other Asian countries.

When it comes to office rents, Singapore has been on the downtrend compared to other powerhouse and gateway cities like Hong Kong, London, and New York, which topped the list.

According to a ranking from property consultancy JLL, the city-state has slipped from its 11th position to 18th rank this year.

JLL Head of Research Chua Yang Liang said office rents in Singapore continued to ease in 2016 amidst the downbeat economy and substantial completion. This, in turn, has raised Singapore's office occupancy cost competitiveness.

"For example, while Hong Kong’s office occupancy cost in US dollars was 181% higher than Singapore a year ago, the gap has widened to 261% by September 2016. Similarly, the rental gap between Beijing and Singapore has widened from 104% to 114% during the same time period,” Chua said.

Meanwhile, JLL Head of Office Leasing Chris Archibold said despite the uncertain economic conditions, the availability of new supply has seen a number of corporations taking advantage of the competitive leasing environment by committing to the new wave of supply.

"The demand is predominantly driven by the efficiencies (space need reduction) that can be achieved by relocating from buildings with small floor plates to buildings with large regular shaped floor plates coupled with changes to more efficient work place strategies. Many of these occupiers are seeing efficiency gains of between 8% to 12%," Archibold said.

He furthered, "Given this trend, leasing activity levels have been strong but overall net take up remains weak. The gap between prime building rents and those on secondary buildings has narrowed over the last 18 months as landlords have sought to attract occupiers. This gap is likely to rebalance somewhat in the coming 12 months as rental pressure is set to hit the older buildings when occupiers who have committed to space in the new projects vacate their existing premises.”