Singapore defies global slowdown in commercial real estate while Hong Kong, New York struggle to fill vacant skyscrapers

Overall occupancy levels in Singapore’s central business district are nearing 95 per cent with rents up 2.5 per cent, according to a property agency

In Hong Kong, meanwhile, some 13 million sq ft of office space sat empty in April, with 15 per cent of the most valuable space still vacant

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A general view of high-rise buildings in downtown Singapore. Prime office rents in the city state increased 2.5 per cent in the first half of 2023. Photo: dpa

Published: 4:02pm, 26 Jun 2023Updated: 4:24pm, 26 Jun 2023

Singapore’s gleaming office towers are defying a global slowdown in commercial real estate, in a sign of the Asian hub’s continuing appeal.

Prime office rents in the city state increased 2.5 per cent in the first half of 2023. The overall occupancy level in the central business district in the second quarter reached 94.4 per cent, edging up from the previous quarter, according to a report from Knight Frank Singapore.

As vacant skyscrapers in metropolises from New York to Hong Kong struggle to lure new tenants, Singapore stands out. Despite rising rents and a fragile global economic outlook, demand for office space in the city state is growing as multinational companies continue to relocate functions and set up headquarters there.

A general view of buildings in Singapore. More than 200 foreign firms have registered in the city since 2021. Photo: Bloomberg

Knight Frank upgraded its 2023 outlook for Singapore’s prime-office rent growth to 3-5 per cent, up from 3 per cent.

The city state saw more than 8,000 newly registered entities in the first five months, according to Knight Frank, citing data from the Accounting and Corporate Regulatory Authority. A total of 203 foreign firms have registered in the city since 2021, according to the Straits Times.

Meanwhile, distress is spreading in the United States’ commercial real-estate industry. The amount of troubled assets climbed to nearly US$64 billion in the first quarter of this year.

New York office vacancies are expected to reach a record 22.7 per cent this year, while 13 million square feet of Hong Kong office space sat empty in April, with 15 per cent of the most valuable space still vacant.

Singapore defies global slowdown in commercial real estate while Hong Kong, New York struggle to fill vacant skyscrapers

Overall occupancy levels in Singapore’s central business district are nearing 95 per cent with rents up 2.5 per cent, according to a property agency In Hong Kong, meanwhile, some 13 million sq ft of office space sat empty in April, with 15 per cent of the most valuable space still vacant

Overall occupancy levels in Singapore’s central business district are nearing 95 per cent with rents up 2.5 per cent, according to a property agency

In Hong Kong, meanwhile, some 13 million sq ft of office space sat empty in April, with 15 per cent of the most valuable space still vacant