Prime office rents in Hong Kong and Singapore are expected to reach parity within two years, driven by diverging dynamics in demand and supply for office properties in the rival business hubs, according to CBRE.
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By the fourth quarter of 2027, tenants in premium office spaces in Hong Kong were set to pay just over US$122 per square foot per year, while those in Singapore would face slightly higher costs at about US$123 per square foot annually, said Ada Choi, head of research for Asia-Pacific at the consultancy.
The trend would close the gap that Hong Kong office landlords had enjoyed since the first quarter of 2004, when tenants in the city paid US$34 per square foot per year compared with US$33 in Singapore.
Since then, the gap generally widened until the first quarter of 2017, when prime office rents in Hong Kong soared nearly sixfold to US$196 per square foot, while Singapore’s rents more than doubled to US$77.
The gap narrowed in recent quarters, with effective rents now just 10 per cent apart: Hong Kong’s prime office space currently commands US$126 per square foot, while Singapore’s rents stand at over US$114.
“Hong Kong is still facing high vacancy, which will make it hard to increase rents overall,” Choi said, adding that financially strained landlords were more accommodating to tenants. In contrast, Singapore faced limited supply.