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Tapering relocation moves from Hong Kong, looming slowdown threaten Singapore office rents after stellar run
- An end to Hong Kong-based companies’ relocation plans and an anticipated slowdown in Singapore’s economy will weigh on office rents in the city state
- A sharp increase in Hong Kong’s office supply could pull rents lower by as much as 10 per cent this year, according to S&P Global Ratings
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The relocation of companies from Hong Kong to Singapore slowed down in the first quarter and will start tapering off soon as they weigh their strategies, while office rents in the city state will begin to pull back amid an anticipated economic slowdown, analysts said.
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Meanwhile, increasing supply in Hong Kong will weigh on rents, which could fall by as much as 10 per cent this year, they added.
“If there’s any softness, it could be felt in the second half of 2023” because of the weakness in Singapore’s economy, said Alan Cheong, executive director of research and consultancy at Savills in Singapore.
Singapore’s gross domestic product (GDP) is expected to grow 0.5 to 2.5 per cent this year, down from 3.6 per cent in 2022, according to a government forecast in February.
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Singapore reverses downward-population trend, while Hong Kong exodus continues
Singapore reverses downward-population trend, while Hong Kong exodus continues
“There’s still momentum” left in companies’ shifting from Hong Kong to Singapore, said Cheong, noting that decisions made from 2019 to 2021 were still being executed. “But I don’t think there will be follow-through momentum. The major moves will begin tapering off from now.”
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