July 22, 2007

Singapore rentals lower than in many major cities

By Zakir Hussain

THE current surge in rentals will not impede Singapore's bid to attract global talent, Manpower Minister Ng Eng Hen said yesterday.

Responding to questions from reporters, he noted that rates here were lower than those in many other international cities: 'The numbers suggest that rentals as an overall percentage of cost may not be prohibitive at this level.

'The truth is, in absolute numbers we are still less than many other city states. We want to make sure we are reasonable and where we can, we'll help.'

In the second quarter of this year, average prime rents in Raffles Place, for instance, hit $13.10 per sq ft.

This compares with $17.80 psf for rents in Hong Kong's Central district.

In a speech earlier to some 400 Singaporeans studying overseas, he said rising property prices were a proxy ofinvestors' confidence in Singapore over the long term.

Home and office rentals, particularly in the central area, have hit an all-time high in recent weeks, prompting the Government to roll out steps to cool the property sector, including releasing more land.

These include a plot of land next to Newton MRT station, which will be developed as temporary office space, he noted.

'More of these particular projects will come on,' he said, adding that there should be no lack of supply in the long term, especially when the Marina Bay Financial Centre is ready in 2010.

Earlier this month, Minister Mentor Lee Kuan Yew cautioned that rising property prices and rents had to be kept in check, as Singapore would otherwise lose its competitiveness.

Dr Ng said yesterday that high housing rentals were confined to prime areas: 'In terms of overall supply across Singapore, there isn't a shortage. The shortage is in certain areas - whether you want to live in (districts) 9, 10, 11 or certain other areas. That must be true for Singaporeans too.

'We have to let some market forces dictate. But I also think there are opportunities, near MRT stations or where transport is more amenable, or certain nicer areas you haven't looked at.'

Overall, Singapore remained competitive. And referring to rentals, he said the Government will 'keep a close eye on that'.

Agreeing with Dr Ng's point about competitiveness, shipbroker Adrian Chong, 24, said: 'Singapore still has an edge as it's the most developed city in this part of the world, and rentals are not as high as those in New York, London or Tokyo.'