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Singapore remains the most desirable office market for expansion in Southeast Asia and third in Asia Pacific, revealed a report from CBRE.
According to the third annual CBRE Asia Pacific Occupier Survey 2018, about 27 percent of respondents said they intend to strengthen their presence in the city-state over the next two years compared to around 18 percent each for Manila and Ho Chi Minh City.
However, Singapore’s tight vacancy and market-wide supply shortage poses a challenge for companies seeking office space. Moreover, office rents here have increased by 8.4 percent since hitting rock-bottom in mid-2017, and this is expected to continue rising until 2021.
“Active sectors such as tech, co-working and banking & finance have accounted for much of the overall recent office absorption. This has resulted in an aggressive uplift in rents and landlord sentiment,” said David McKellar, CBRE’s executive director and head of advisory & transaction services office occupier team in Singapore.
The CBD is also forecasted to see solid relocation activity as 28 percent of those polled plan to increase their office space downtown, while 41 percent are targeting higher take up in major business districts. On the other hand, 33 percent intend to expand in co-working centres, while 35 plan to enlarge their footprint in decentralised locations.
Meanwhile, Bangalore and Shanghai are the top markets for office expansion in Asia Pacific over the next two years, according to 34 percent and 30 percent of respondents.
Overall, 28 percent of those polled are considering to reduce their office space requirements, while 45 percent are planning to deepen their presence in Asia Pacific over the next two years.
The survey polled 50 corporate real estate executives from multinationals and large Asian companies from October to December 2017.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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