Tech firms drive up premium office rents in Singapore

By Timothy Tay/ EdgeProp Singapore|February 14, 2020 4:39 PM SGT

SINGAPORE (EDGEPROP) – Premium office occupancy costs in Singapore have been ranked as the 14th most expensive in the world, with net effective rents and occupancy costs running at about US$117 ($162.73) per year psf (py/psf), or just over half the premium rents in Hong Kong’s Central District.The result is based on JLL’s “Premium Office Rent Tracker” report, which compares occupancy costs for premium office buildings in leading global real estate markets.

According to Chris Archibold, head of leasing at JLL Singapore, “tech firms have been prioritising Singapore as a key hub due to the government’s supportive policies and the conducive business environment here. The smart nation digitalisation plans have also helped to fuel the growth of this sector”.

While some of this occupational demand is finding its way to business park locations, the office sector is a significant driver of Grade-A office space in Singapore due to the need to attract and retain top talent, says Archibold. Five Southeast Asian cities, including Singapore, rank in the world’s top 86 most expensive premium office rental markets. Ho Chi Minh City takes 38th place with occupancy costs at about US$78 py/psf, while Jakarta clinched 55th place at US$60 py/psf.

Table: JLL

These two cities, as well as other gateway cities in Southeast Asia, are competing with Singapore to become the next Silicon Valley, says Archibold. “Their fast-growing tech start-up ecosystems are diverting some of the attention of venture capital and private equity investors from Singapore. They may eventually challenge Singapore for its position as Asia’s investment and innovation hub,” he adds.

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