Five Southeast Asian cities rank in the world’s top 86 most expensive premium office rental markets, according to the fifth edition of JLL’s Premium Office Rent Tracker.
Singapore held the 14th spot worldwide, with net effective rents and occupancy costs running at US$117 per year per square foot (psf). The rents in the other four ranked Southeast Asian cities were Ho Chi Minh City (38th position, US$78 psf), Jakarta (55th position, US$60 psf), Manila (66th position, US$54 psf), Bangkok (77th position, US$46 psf) and Kuala Lumpur (85th position, US$30 psf).
Globally, the banking and financial industry sectors continue to be the major occupiers of premium office space but technology firms - in particular online platforms - are playing a greater role in propelling demand for premium office space, said JLL.
According to data from the Economic Development Board, 80 of the top 100 global tech companies, and more than 4,000 home-grown and international startups from around the world have established their operations in Singapore.
“Tech firms have been prioritising Singapore as a key hub due to the government’s supportive policies and the conducive business environment here. The smart nation digitalization plans have also helped to fuel the growth of this sector. Though some of the occupational demand created is going to business park locations, the sector has also been a significant driver of grade A office space due to the need to attract and retain top talent,” said JLL Singapore's head of leasing, Chris Archibold.
That being said, other gateway cities in Southeast Asia, including Jakarta and Ho Chi Minh City, are now competing with Singapore to become the next Silicon Valley.
Specifically, their fast-growing tech start-up ecosystems are diverting some of the attention of venture capital and private equity investors from Singapore. They may eventually challenge Singapore for its position as Asia's investment and innovation hub said JLL in a statement.