In Singapore, the total cost of annual occupancy per workstation slipped 3 percent year-on-year to US$16,540 according to DTZ global ranking for 2009.
This was an outcome of the decline in office leases. According to Chua Chor Hoon, senior director of DTZ Singapore, “Prime office rents in Raffles Place fell 15.8 percent in Q4 2008, resulting in a drop of 3 percent for the whole of 2007”.
The most recent ranking placed Singapore in the 10th rank as the most expensive place out of 114 territories in the whole world covered in the survey of 2009, which compared the total cost of occupancy per workstation evaluated in US currency as at end of 2008. The country placed 7th in the survey of 2008, which was based on end of 2007 figures.
London (West End) and Tokyo (Central 5 wards) exchanged places. Tokyo, which was in the 5th rank in 2008, became the most costly location, while the West End of London, which was the most costly office market since 2001 after DTZ first gathered the rankings, was placed in the 5th rank in the survey of 2009.
”Due to the strong appreciation of the Japanese yen and increase in space utilisation standard per workstation, Tokyo (Central 5 Wards) occupancy costs per workstation grew 26 percent year-on-year despite weakening occupier demand in the second half of 2008. Similar trends were noted in Hong Kong and Singapore, where occupancy costs started trending down towards the fourth quarter of 2008”, according to the DTZ report.
The annual total cost of occupancy per workstation for the Central 5 Wards of Tokyo increased 26.1 percent to US$22,820 in the survey of 2009. Paris was ranked second as the most costly location in the most recent survey, perceived a decline of 0.4 percent to US$22,300. Hong Kong’s cost slipped 13.3 percent to US$21,930, placing it in 3rd rank, followed by Dubai in 4th rank, with a total cost of occupancy per workstation of US$21,620 yearly.
Total occupancy cost is defined by DTZ as the average total price of renting prime net workspace, which includes leases and expenses such as property tax and maintenance costs, if normally payable by the occupant, but excludes fitting-out costs, rent-free periods, and some leasing incentives.
In terms of leases and several outgoings per square foot, London (West End), Moscow, and Hong Kong were considered the three most costly office locations in the survey of 2009. However, because of a higher standard of space utilisation per workstation, Central 5 wards of Tokyo was the most costly office location worldwide on a price per workstation basis. The space utilisation per workstation was 144 sq ft compared to Moscow with 84 sq ft, Hong Kong with 118 sq ft, and London’s West End with 118 sq ft.
DTZ noted that aside from the dynamics of supply and demand in the local market, and the changes in standards of space utilisation per workstation, occupancy prices of the business locations were also affected by the unpredictable rise and fall in the values of local currencies against the US dollar.
In Asia-Pacific, 76 percent of the surveyed markets predict the costs of office occupancy to decline, while 24 percent expects that the occupancy costs will still always be stable for the entire year.