ST : S'pore office rents tumble

Dec 2, 2009
S'pore office rents tumble
Slide set to continue but at slower rate as office leasing activities pick up
By Joyce Teo, Property Correspondent

GREAT news for office tenants in Singapore but far leaner times for landlords: Office rents have plummeted by more than half in the past 12 months.

On average, they fell a whopping 53.4 per cent from their peak in the third quarter of last year to Sept 30 this year - the second-fastest rate of fall in the world. Only rents in Kiev, Ukraine, fell more quickly, by 64.6 per cent.

That meant the Republic fell from 9th spot to No.32 in the latest Top 50 most expensive markets list, according to a half-yearly global survey done by US-based consultancy CB Richard Ellis.

The occupancy cost here - rent plus local taxes and service charges - is now US$63.89 (S$88.25) per square foot (psf) a year, down 23 per cent from six months ago when it was in 15th place. That is down more than half from US$135.13 psf a year ago.

'We've seen a dramatic correction in rents but in a way, it is helping businesses secure far more competitive business costs,' said CBRE's executive director, office services, Mr Moray Armstrong.

'The market is now roughly where it was three years back.' Just two years ago, Singapore was No. 1 in terms of the highest 12-month rise in occupancy costs across the globe. This threw many tenant companies into a frenzied search for cheaper digs.