Singapore office rents sharply dropped by 16.3%

It's the world's largest decline.

According to CBRE, while the dominance of Asia in the world’s most expensive office locations continued, the region also had markets which recorded the sharpest annual decrease in office rents.

It noted that Singapore experienced the largest annual decrease worldwide (-16.3%) due, in part, to increases in both new supply and the availability of lower-priced secondary space. 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.

Meanwhile, Jakarta’s 38.9% increase was driven by a substantial recovery in domestic demand in the wake of Indonesian sovereign debt’s return to investment-grade status, which energized leveraged investment initiatives and drove up demand for prime office space across the capital. 

Asia-Pacific had 21 markets ranked in the top 50 most expensive, including six of the top ten— Hong Kong Central, Beijing’s Finance Street, Beijing’s Jianguomen CBD, New Delhi’s Connaught Place CBD, Hong Kong-West Kowloon and Tokyo (Marunouchi/Otemachi).

Hong Kong Central’s position as the most expensive office market continues to be bolstered by its status as a leading global financial center. Although financial institutions have become more cost sensitive, with some considering relocating to less expensive space outside the CBD, high-quality and premium space is still sought after, especially by mainland Chinese firms which are increasingly setting up their offices in Hong Kong (Central) in prestigious buildings.

The most expensive market in the global ranking from the Pacific Region was Sydney (US$119.23 per sq. ft.), which came in at 13th.