Singapore is 7th most expensive office location worldwide

As Grade A office rents surged 18.4% to US$87 psf/year in the first half of 2011.

With the office property market entering a normalisation phase following the stabilisation in demand by large space occupiers, Grade A office rents in the Singapore CBD increased at a moderated pace of 18.4 per cent (or 12.5 per cent in local currency terms) during the period from January to June 2011. This is compared to the 26.6 per cent growth (16.8 per cent in local currency terms) in 2H 2010, according to Colliers’ report.

Nonetheless, at an occupancy cost of US$87.00 per sq ft per year as of end-June 2011 (S$8.90 per sq ft per month) for Grade A CBD office space, Singapore continued to climb up the ranks to be the seventh most expensive office locations globally, up from the ninth position six months ago. This is also Singapore’s highest ranking in two years.

Notably, Tokyo slipped out of the top three ranking for the first time since December 2008, after being displaced by Paris as the third most expensive office location.

Additionally, within the Asia-Pacific region, Beijing saw the highest rental growth at 26.9 per cent in 1H 2011. Ho Chi Minh City’s office, in contrast, registered the highest rental contraction in the region at -34.1 per cent.