Singapore ranks 7th most expensive place for prime offices in APAC

Prime office rents stood at 33.7% in APAC.

Singapore is ranked seventh as the most expensive place to rent prime offices, with a 21% premium price, a report by Savills said.

In Asia Pacific, prime office rents stood at 33.7%.

“Singapore’s office market rents continued rising, albeit at a low rate, because of the relative dearth of new supply at the start of the year enhanced landlords’ confidence, and when new supply entered the market in Q2 2024, the holding power of the new building owners were strong and who did not yield to low ball offers,” said Alan Cheong, Executive Director, Research & Consultancy at Savills Singapore. 

“Overall, these twin conditions are likely to tide us through the year with rents ranging from -1% to +1% with the top-of-class grade offices sporting renting increases,” he added. 

Singapore sees marginal growth of 0.3% this quarter.

However, net effective costs in APAC have remained flat in Q2 at 0%, due to several major Chinese markets recording significant cost declines this quarter. 

Shenzhen has seen the largest decline of -4.4%, as many occupiers in China focus on reducing operational costs, putting downward pressure on rents. 

Seoul is seeing a growth of 5.7% this quarter, driven by strong demand and limited new supply pipeline.

Rents for top prime office space now average 31.4% over those for Grade A offices in markets across the world, with North America having the highest premium, at 62.5% above Grade A stock.

Gross prime office rents in major cities around the world rose 3% in the past year whilst tenants’ ‘all-in’ net effective costs have risen 3.8%, as the structural trend towards seeking high-quality premium office space continues. 

However, rental was lowest in Sydney and Seoul, at 13.5% and 20% respectively. 

Prices exceed 70% in Shenzhen and Beijing, with top-tier offices remaining highly desirable to occupiers, although the report noted that high premiums may begin to erode as rents have begun to decline in some prime Chinese locations.