Singapore Makes Space for Hong Kong Congestion
A lack of new developments available to satisfy the growing demand for office space in the world’s most expensive commercial rental location, Hong Kong, could see some global businesses relocating their Asian headquarters.
According to Reuters “Singapore is benefiting from a shortage of office space in Hong Kong as multinational companies expanding in Asia turn increasingly to the Southeast Asian city-state for their regional bases”.
Over the last 10 years Singapore has been reclaiming land near to its central business district in order to accommodate an expanding requirement for office space. Nearly 3 times the amount of new space is expected to be available this year, compared with Hong Kong.
Firms wishing to expand in Hong Kong are either having “to outbid other prospective tenants or move out of the city centre”, with most new developments away from the central business district. Companies may now consider the switch to Singapore, where lower average rents and the additional opportunities for expansion could seem more appealing.
According to Frank Marriott, senior director at Savills, “while the short term outlook favours landlords in Hong Kong, Singapore could see larger rent increases in the medium term”.
This trend seems to be echoed in the serviced office sector, where officebroker.com have received more than double the number of enquires for Singapore than Hong Kong, year to date.