While Hong Kong faces a shortage of prime office space, Singapore has a glut.
The head of research and consultancy and deputy managing director at Savills Hong Kong, Mr. Simon Smith, believes that Singapore is well placed to take advantage of the imbalance.
Based on Savills research, supply of Grade A office space in the Central Business District is expected to grow by 47 percent over the next three years, compared with just 6 percent in HK.
It also added that rents are expected to stay close to around US$4 (S$5.60) to US$6 per sq ft.
However, the research indicates a different situation in Hong Kong, where rents are anticipated to rise by around 5 to 10 percent to approximately US$12 per sq ft.
According to Mr. Smith, Singapore is well placed to draw surplus office demand from Hong Kong, as the latter lacks cost competitiveness.
Prices of prime office space in Singapore are expected to increase by up to 5 percent this year.
Much of Hong Kong’s growth came from investors in mainland China but a sluggish growth is expected this year as the Chinese government gradually cools off its stimulus measures.