April 16, 2008, 1.10 pm (Singapore time)

HK apartment rents the world's highest: survey

SINGAPORE - Hong Kong has the world's priciest apartment rents, with the lease for a three-bedroom unit costing more than US$9,700 ($13,170) on average a month, a survey released on Wednesday said.

Singapore, which positions itself as a South-east Asian business hub, saw Asia's biggest year-on-year rental increase of more than 30 per cent last year, the survey by human resources firm ECA International showed.

The survey covered 2007 and is based on lease prices for a three-bedroom apartment in popular expatriate areas, ECA International said.

Asian cities, led by Hong Kong, accounted for six out of the top 10 locations that have the world's most expensive rentals for three-bedroom apartments, it said.

Other Asian cities in the top 10 global list are Mumbai which ranked sixth, Seoul seventh, Singapore ninth, and Ho Chi Minh City 10th.

Monthly rentals in Asia were on average US$3,820, well above the global level of US$2,950, said ECA International.

Globally, Moscow ranked second, followed by New York City, Tokyo, and London in fifth spot, said ECA International.

'A robust economy and increased demand for high-end accommodation have been instrumental in driving rental prices up,' said Lee Quane, ECA International's general manager in Hong Kong.

Hong Kong apartment rents of US$9,734 were more than double Asia's average and reflected the geographical advantage of the Chinese territory for foreign firms wanting to build a base in the region, ECA said.

'Particularly in the financial services industry, people are moving into Hong Kong so, in spite of its relative high cost, it still remains one of the prime locations for foreign companies to establish themselves,' said Mr Quane.

A three-bedroom apartment in Singapore rented for US$4,460 a month on average last year, compared with 3,364 in 2006, ECA said.

'The demand for high-end accommodation has risen, driving up rental prices, which can be partly explained by companies expanding their operations in Singapore together with government initiatives to attract skilled workers from overseas,' he said.

At the same time, a number of factors limited the supply of property available in Singapore, he said.

Mumbai, India's financial hub, had the region's second-highest rental rise of 21 per cent. A three-bedroom apartment there cost US$5,991 to lease, ECA said.

For other major Asian cities, Jakarta ranked 10th in Asia, Manila was 14th, Bangkok came in 15th followed by Kuala Lumpur in 16th spot.

According to the survey, Karachi is the cheapest city in the world to rent a three-bedroom apartment.

ECA says its annual survey of rentals compares lease prices in 92 global cities. -- AFP