THE occupancy cost for office space in Singapore is now higher than in Hong Kong, according to a new report.
Data from property firm CB Richard Ellis (CBRE) show that total occupancy cost here hit US$10.42 per square foot per month (psf pm) at the end of 2007.
By comparison, total occupancy cost for Hong Kong was US$9.74 psf pm at the end of last year.
Total occupancy cost reflects base rents as well as other property-related expenses such as management fees and property tax, according to CBRE.
Prime office rents in Singapore rose 19.1 per cent in just the fourth quarter of 2007, CBRE's report said. For the entire year, office rents rose a staggering 92.3 per cent.
'Competition for pockets of vacant space in the central business district (CBD) remained intense, and several expansion transactions towards the end of the (fourth) quarter suggested that demand may be sustained,' CBRE said.
In response to the report, the Urban Redevelopment Authority (URA) pointed out that CBRE represents just one viewpoint.
A recent Cushman & Wakefield (C&W) report, for example, said that office occupancy cost for prime office space in Singapore was US$10.80 psf pm in end-2007, much lower than the US$19.90 psf pm in Hong Kong.
The discrepancy between the two sets of data was due to the fact that CBRE considers office space in Hong Kong's CBD as well as other areas outside the city centre when compiling office occupancy cost data for Hong Kong - while C&W only considers Hong Kong's CBD. Both firms look only at Singapore's CBD when calculating occupancy cost here.
Separately, property firm Savills - which said that office rents in Singapore are close to Hong Kong's at present - predicted that rents here could increase by another 15-20 per cent this year.
Office rents in Hong Kong, on the other hand, are expected to rise by a slower 5 per cent in 2008, said Simon Smith, Savills' head of research and consultancy. He expected rents in Singapore to overtake rents in Hong Kong sometime this year.
Mr Smith also said that luxury home prices in Singapore will climb 8-12 per cent this year, after jumping about 50 per cent in 2007.
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