Singapore’s commercial rents soar to close gap with Hong Kong as Alibaba, ByteDance, Tencent open offices in Southeast Asia’s hub

Name: Museum of Ice Cream opens first overseas location in Singapore
Uploaded: 2021-08-24T23:30:14.000Z
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Description: Museum of Ice Cream opens first overseas location in Singapore

The gap peaked in 2017, when Hong Kong office rents equalled 173 per cent of the rents charged in Singapore, according to Cushman & Wakefield

Narrowed gap ‘creates a positive opportunity for Hong Kong, as it becomes more competitive’

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The central business district of Singapore. Photo: Bloomberg

Cheryl Arcibal

Published: 7:30am, 25 Aug 2021Updated: 2:01pm, 25 Aug 2021

Singapore’s office property market is gradually catching up with that of Hong Kong, the Lion City’s rival business hub, in terms of rents and prices, with Chinese technology giants such as Alibaba Group Holding, Tencent Holdings and ByteDance expanding in the city state.

The gap peaked in 2017, when Hong Kong office rents equalled 173 per cent of the rents charged in Singapore, according to Cushman & Wakefield. Last year, the distance between the rents charged in both cities stood at 108 per cent, still in favour of Singapore.

“As the two cities continue to attract investors and occupiers, we are seeing a more defined role, whereby companies looking for more exposure to China will prefer to have Hong Kong as their regional base, while Singapore is a better location for companies looking to grow and capitalise on the emerging Southeast Asian markets,” said Wong Xian Yang, head of research, Singapore at Cushman.

“Tech companies have been expanding in the city state. Examples include ByteDance, which has taken up large tranches of space in One Raffles Quay and Guoco Tower, and Amazon, [which has taken] up three floors at Asia Square Tower 1,” he added.

Mainland Chinese companies are playing a driving role in both markets. And their demand for prime offices that will serve as their bases for the fast-growing Southeast Asian markets has reduced the gap between rents in Singapore and Hong Kong.

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Museum of Ice Cream opens first overseas location in Singapore

The trade war between China and the United States has played a role too. Singapore is being preferred as a base by many companies looking to avoid tariffs, said Sing Tien Foo, director of the Institute of Real Estate and Urban Studies at the National University of Singapore.