Published November 27, 2008

Occupancy costs fall in S'pore: CBRE

But survey finds Republic is world's 9th most expensive office market


(SINGAPORE) The republic is still one of the most expensive places in the world to do business in, even though office occupancy costs here have dropped, the latest survey by CB Richard Ellis (CBRE) shows.

As in the firm's previous survey in May, Singapore was the world's ninth most expensive office market, though occupancy cost dropped to US$135.13 per square foot per year from US$139.31 in May.

In CBRE's November 2007 survey, Singapore posted the world's biggest 12-month increase in office occupancy costs. But in the May 2008 survey, it dropped to third place. And in the latest ranking, it is 13th.

Occupancy costs here rose 27.8 per cent in the 12 months to November 2008, down from 86 per cent in the 12 months to May 2008. CBRE's chief global economist Raymond Torto said that globally the rate of change is generally slowing, and in some markets the pricing direction is down. 'Our current perceptions are greatly affected by the current economic malaise.' he said. 'We tend to forget how fast rents and occupancy costs were rising over the past 12 months. The turn in rent trajectory will provide some relief to occupiers and angst to owners.'

Abu Dhabi in the United Arab Emirates (UAE) registered the fastest-growing office occupancy costs in CBRE's November 2008 Survey. Costs there jumped 94.6 per cent in the past 12 months.

'The rise in occupancy costs in the UAE has reflected market fundamentals - limited supply of quality office space and high demand from international firms, primarily law firms, financial institutions and real estate and construction companies planting a footprint in the UAE,' CBRE said. Ho Chi Minh City in Vietnam, which registered the fastest-growing occupancy costs CBRE's May 2008 ranking, fell to second spot in the latest survey. Costs there rose 51.4 per cent in the past 12 months.

London's West End and Moscow remain the world's two most expensive office markets. Hong Kong's CBD, Tokyo's Inner Central District and Mumbai's Nariman Point round out the top five.