Singapore’s office rents are expected to surge at the end of 2014 after extending a “modest” rebound that started in the second quarter, according to the biggest office trust in Asia outside Japan.
The recovery will be led by companies seeking to set up regional headquarters in Singapore as they face the lowest supply in office space in two decades, Lynette Leong, chief executive officer of the manager for CapitaCommercial Trust, said in an interview in Singapore yesterday.
Office rents in the business district rose in the past three months, the first gain since the fourth quarter of 2011, according to brokerage Colliers International. Singapore’s economy rose an annualized 15.2 percent last quarter from the previous three months, the fastest pace in more than two years, as services strengthened and manufacturing rebounded.
“I don’t think we’ll go back to the peak we experienced before the crisis, not so soon, anyway,” said Leong, who predicted a rebound in Singapore’s office rents in January. “Given that the supply is going to be very limited in the next three years, it will be quite sharp at the tail end. Towards the end of 2014 will be a very strong year.”
Singapore, a country smaller than the size of New York City, is drawing more companies as rents dropped in the past year. The city’s office costs slumped 16 percent in the past year, the most globally, according to a CBRE Group Inc. survey last month, making it cheaper than Asian locations including Hong Kong, Shanghai, Tokyo and Mumbai and Sydney.
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