Exploring Office Occupancy Costs in Singapore: A Comparative Study with Hong Kong’s Prime Office Space

by | Oct 27, 2023

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Occupancy Costs in Singapore

Occupancy Costs in Singapore

According to a report by Savills Singapore, Occupancy Costs in the residential property sector are expected to increase in 2023, reflecting a global trend.

This is driven by factors such as environmental, social, and governance (ESG) criteria becoming increasingly important for occupiers.

In 2022, residential occupancy costs rose by 3.

6 percent year-on-year.

Comparatively, in London’s West End, known for its high property prices, the increase in occupancy costs was only 0.

8 per cent.

The report highlights that owning a residential property in Singapore can serve as a robust retirement plan due to the lower rental vacancy rates and the potential for capital appreciation.

On the other hand, tenants in office buildings have benefited from lower rental costs, given the higher vacancy rates.

The report suggests that optimising manufacturing efficiency and supply chain resilience will be crucial for occupiers in the coming years.

CBRE’s EMEA head of research and consultancy added that inflationary pressures and limited new supply can cause rental increases, particularly in expensive locations within the Asia-Pacific region.

The Urban Redevelopment Authority and the Building and Construction Authority in Singapore have implemented measures to ensure that office and private residential developments maximize usable space, thereby optimizing occupancy costs.

What are occupancy costs? 

Occupancy costs refer to the expenses associated with occupying a property, whether it’s for residential or commercial purposes.

In the context of Singapore, occupancy costs primarily relate to rental expenses for office spaces in the Central Business District (CBD).

These costs encompass not only the base rent but also additional charges such as service fees, property taxes, and maintenance costs.

For businesses in Singapore, office occupancy costs can significantly impact their overall financials.

The cost per square foot is a common metric used to measure these expenses.

The commercial property market in Singapore is highly competitive, with demand often exceeding supply.

As a result, office rents can be relatively high, especially in prime locations.

How to calculate occupancy costs

Calculating occupancy costs involves considering various factors such as the size of the office space, location, lease terms, and additional charges.

When determining occupancy costs, businesses often consult analysts who specialize in property valuation and market trends.

To calculate occupancy costs accurately, businesses need to factor in the total rental price per square foot, the number of employees, and the duration of the lease.

It’s essential to consider any potential price escalations during the lease term.

Factors that affect occupancy costs

Several factors influence occupancy costs in Singapore.

Landlords play a significant role in determining rental rates based on market demand and the location’s attractiveness.

Office occupancy costs are affected by market conditions, such as the balance between supply and demand for office space in the CBD.

Moreover, factors like the region’s economic growth and the presence of businesses in various industries impact occupancy costs.

For example, the Asia Pacific region’s growing importance as a global business hub can drive up office rents.

Additionally, supply chain disruptions and consultancy services’ demand can indirectly impact occupancy costs, as businesses may need larger office spaces to accommodate their expanding operations.


In conclusion, occupancy costs in Singapore comprise not only the base rent but also additional charges such as service fees and property taxes.

Calculating these costs requires careful consideration of factors like the size of the office space, lease terms, and market trends.

Factors such as landlord decisions, economic conditions, and industry demand also play a significant role in determining occupancy costs.

Key Takeaways

  1. Definition of Occupancy Costs: Occupancy costs include rental expenses for residential or commercial properties, comprising base rent, service fees, property taxes, and maintenance costs. These are particularly significant for businesses in Singapore.
  2. How to Calculate Occupancy Costs: Accurate calculations involve considerations such as office size, location, lease terms, and potential price escalations. Property valuation analysts often assist in this process.
  3. Factors Affecting Occupancy Costs: Landlords, market conditions, economic growth, and industry presence influence occupancy costs in Singapore. Demand and supply dynamics in the Central Business District play a pivotal role.
  4. Expected Increase in Occupancy Costs: A study by Cushman & Wakefield predicts a 5-7% rise in occupancy costs in Singapore by 2024, driven by factors like rising labor costs, property taxes, and energy prices.
  5. Impact on Businesses and Consumers: The projected cost increase will impact both businesses and consumers. Businesses need to plan for higher costs, potentially necessitating adjustments in office lease structures and the co-working sector. Consumers, particularly small and medium-sized enterprises, may face challenges and should explore cost-effective alternatives.
  6. Real Estate Sector Performance: The real estate sector in Singapore is thriving, with stocks of major players experiencing a significant increase of over 1%. This growth is attributed to the demand for office and retail spaces due to expanding businesses and technology-driven spaces.
  7. Singapore Government’s Measures: The Singapore government is introducing measures to assist businesses in managing occupancy costs. These measures include tax breaks and grants for businesses that relocate to lower-cost areas and a fund to support premises upgrades. These initiatives aim to enhance business resources and product and service quality.
  8. Strategies to Reduce Occupancy Costs: Businesses in Singapore can reduce occupancy costs by negotiating favorable lease terms, considering shared office spaces, and implementing remote work arrangements. These strategies help optimize costs and improve financial sustainability.
  9. Impact of Occupancy Costs on Business Performance: High occupancy costs can negatively impact business profitability and growth. Effective management and reduction of occupancy costs are crucial for financial success.
  10. The Future of Occupancy Costs in Singapore: The future of occupancy costs in Singapore is influenced by market conditions and the ongoing impact of COVID-19. As businesses adapt to changing work environments, demand for office spaces may fluctuate, affecting occupancy costs.

Event News: Occupancy Costs in Singapore Expected to Rise in 2024

Event News Occupancy Costs in Singapore Expected to Rise in 2024

A study by Cushman & Wakefield predicts a 5-7% increase in occupancy costs

According to a recent study conducted by Cushman & Wakefield, one of the world’s leading real estate services firms, Singapore is expected to experience a 5-7% increase in occupancy costs by 2024.

This exclusive study analyzed various factors contributing to rising costs, including the limited supply of available space and the increasing demand from businesses.

The study highlighted that prime office occupancy costs in Singapore are projected to rise due to the growing demand from both local and international companies.

With its strategic location, stable political environment, and robust economy, Singapore has become a desirable destination for businesses across different sectors.

Factors contributing to the increase include rising labor costs, property taxes, and energy prices

Several factors are expected to contribute to the projected increase in occupancy costs.

Rising labor costs, property taxes, and energy prices are among the key factors that will impact businesses operating in Singapore.

As the cost of labor continues to rise, businesses may face challenges in managing their overall expenses.

Singapore’s position as the 14th-most expensive office market in the Asia Pacific region further adds to the pressure on occupancy costs.

The limited supply of available office space and the high demand from businesses looking to establish their presence in Singapore contribute to the rising costs.

Impact on businesses and consumers

The projected increase in occupancy costs will have implications for both businesses and consumers of office space in Singapore.

Businesses will need to factor in these rising costs when planning their budgets and making strategic decisions regarding their office space needs.

It may also lead to adjustments in current office lease templates and potentially impact the coworking office space market.

For consumers of office space, the rising costs may pose challenges, especially for small and medium-sized enterprises.

It is crucial for businesses to carefully evaluate their space requirements and explore alternative options, such as flexible office solutions, to manage costs effectively.


In conclusion, the study by Cushman & Wakefield highlights the expected rise in occupancy costs in Singapore by 2024.

Factors such as rising labor costs, property taxes, and energy prices contribute to this upward trend.

Businesses and consumers of office space need to be prepared for these cost increases and explore strategies to mitigate their impact on operations and budgets.

Daily Markets Briefing: STI Up 1.03%, Active Stock 5

Daily Markets Briefing STI Up 1.03 Active Stock 5

Real estate sector leads the gains, with stocks such as CapitaLand and City Developments rising more than 1%

In the Singapore business landscape, the real estate sector has been performing exceptionally well.

Stocks of major players like CapitaLand and City Developments have experienced a significant increase of more than 1%.

This surge in stock value can be attributed to the rise in demand for office and retail spaces.

As businesses continue to expand, occupancy costs have also increased.

The real estate sector benefits from the increase in business costs as companies require more office spaces to accommodate their growing operations.

Additionally, the demand for technology-driven spaces has emerged, further driving up the demand for office spaces.

Analysts say the sector is benefiting from strong demand for office and retail space, as well as rising rents

Analysts have noted that the real estate sector in Singapore is benefiting from robust demand for office and retail spaces.

As more companies set up their operations in Singapore, the demand for office spaces has risen significantly.

This demand is not limited to local companies but extends to international businesses as well.

The positive growth in the sector is also reflected in rising rents.

Landlords are experiencing increased rental rates as the demand for office spaces continues to outpace supply.

This trend signifies the flourishing nature of the real estate market in Singapore.

Impact on occupancy costs

The rise in demand for office spaces and increasing rents directly impact occupancy costs in Singapore.

The cost of occupying commercial units has seen significant increases across various locations in the country.

For instance, in Northpoint City, a popular shopping mall in Singapore, rental rates have surged due to high demand.

Similarly, city area rents and those in the city center have experienced notable increases.

Even in Eastern cities, the impact of rising demand and limited supply has led to an uptick in occupancy costs.

Overall, the real estate sector’s growth and the consequent surge in occupancy costs highlight the strong business environment in Singapore.

The increasing demand for office and retail spaces demonstrates the country’s ability to attract businesses and foster economic growth amid a competitive market.

Top News: Singapore Government to Roll Out New Measures to Help Businesses with Occupancy Costs

Top News Singapore Government to Roll Out New Measures to Help Businesses with Occupancy Costs

The Singapore government has recently announced new measures aimed at assisting businesses in managing their occupancy costs.

With the impact of the COVID-19 pandemic still being felt, these measures come as a relief for Singapore businesses across various sectors, including retail, commercial, e-commerce, and macroeconomic sectors.

Measures include tax breaks and grants for businesses that relocate to lower-cost areas

One of the key measures introduced by the government is the provision of tax breaks and grants for businesses that choose to move their operations to lower-cost areas.

This initiative aims to help businesses reduce their expenditure on rental costs by relocating to areas with more affordable rental rates.

By doing so, businesses can maximize their profitability and sustainability in the long term.

These measures are particularly beneficial for small and medium-sized businesses that are more sensitive to occupancy costs.

The government also to set up a new fund to help businesses with the cost of upgrading their premises

In addition to tax breaks and grants, the Singapore government will establish a new fund specifically designed to assist businesses in covering the cost of upgrading their premises.

This fund aims to encourage businesses to improve their facilities and infrastructure, enhancing their competitiveness and productivity.

By investing in the upgrade of their premises, businesses can create a more attractive and efficient work environment for their employees and customers, ultimately contributing to their overall success.

Impact on businesses and consumers

These new measures will have a significant impact on both businesses and consumers in Singapore.

By reducing occupancy costs and providing financial support for upgrades, businesses will have more resources to invest in growth initiatives, such as expanding their product offerings or improving customer service.

This, in turn, benefits consumers as they can expect a wider range of quality products and services at competitive prices.

Overall, the government’s initiatives to support businesses with occupancy costs demonstrate Singapore’s commitment to fostering a conducive environment for businesses to thrive.

By mitigating the financial burden associated with rental costs and encouraging facility upgrades, these measures contribute to the overall growth and resilience of Singapore’s economy.

Recommended Articles: Occupancy Costs in Singapore

Recommended Articles

How to Reduce Your Occupancy Costs

For businesses in Singapore, managing occupancy costs is crucial for financial sustainability.

Here are a few strategies to help reduce your occupancy costs:

  1. Negotiate Lease Terms: When renewing or signing a lease, negotiate for favorable terms such as lower rent, longer lease periods, or rent-free periods. This can significantly reduce your occupancy costs in the long run.
  2. Consider Sharing Space: Sharing office space with another business can help split costs and reduce your overall occupancy expenses. It also allows for networking opportunities and collaboration.
  3. Implement Remote Work: With the ongoing COVID-19 pandemic, remote work has become more prevalent. Consider allowing employees to work from home or implement flexible work arrangements to reduce the need for a large office space.

The Impact of Occupancy Costs on Business Performance

Occupancy costs have a direct impact on the financial performance of businesses in Singapore.

High occupancy costs can eat into profits and hinder growth.

By effectively managing and reducing occupancy costs, businesses can improve their bottom line and allocate resources to other areas of growth and expansion.

The Future of Occupancy Costs in Singapore

The future of occupancy costs in Singapore is expected to be influenced by various factors, including market conditions and the ongoing COVID-19 pandemic.

The pandemic has reshaped the business landscape, with remote work becoming more prevalent and some businesses downsizing their office spaces.

However, Singapore remains an attractive location for businesses due to its strong infrastructure, skilled workforce, and supportive government policies.

As the economy recovers, demand for office spaces may rebound, potentially impacting occupancy costs.

In summary, managing and reducing occupancy costs is essential for businesses in Singapore.

By implementing strategies such as lease negotiation, space sharing, and remote work, businesses can optimize their occupancy costs and improve their overall financial performance.


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It goes beyond just creating a logo and slogan; it involves developing a strong and reliable brand identity that resonates with your target audience.

By leveraging branding effectively, you can showcase your business’s distinctiveness, create a point of difference, and become more recognizable in the market.

To utilize branding successfully, it is crucial to go beyond superficial elements and consider essential aspects such as brand strategy, online presence, and exceptional customer experience.

Developing a clear brand strategy that aligns with your target market and consistently communicating your values will help establish a strong brand presence.

Building a robust online presence through a professional website and optimized social media profiles will further enhance your brand’s recognition.

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Looking at successful examples, companies like Apple, Nike, and Coca-Cola have effectively utilized branding to become household names.

These brands have consistently communicated their values, unique selling propositions, and quality through cohesive messaging and captivating visual identity.

By following these best practices, you can create a strong emotional connection with your customers and stand out in a crowded marketplace.

In conclusion, investing in branding is essential for any business, regardless of its size.

It allows you to differentiate yourself from competitors, become more recognizable, and cultivate trust and loyalty among customers.

By developing a strong brand identity and consistently communicating your values, you can set yourself apart and position your business for long-term success in the market.

So, don’t underestimate the power of branding and start incorporating it into your business strategies today.

Frequently Asked Questions

What are occupancy costs in Singapore?

Occupancy costs in Singapore refer to the expenses incurred by tenants when renting or leasing a property.

These costs typically include rental fees, service charges, and any other fees associated with occupying the space.

How are occupancy costs calculated in Singapore?

Occupancy costs in Singapore are typically calculated by adding the base rent or lease amount to any additional fees, such as service charges or maintenance fees.

The total amount is then divided by the total area of the rented space to determine the cost per square foot.

What factors contribute to the occupancy costs in Singapore?

Several factors contribute to the occupancy costs in Singapore.

These factors include rental rates, location, size of the rented space, lease terms, additional fees (such as service charges), and market demand for the specific type of property.

How do occupancy costs in Singapore compare to other cities like Hong Kong?

Occupancy costs in Singapore can vary compared to other cities like Hong Kong.

While both cities are known for their high rental rates, the specific factors affecting occupancy costs may differ between the two cities.

Factors such as market demand, location, and lease terms can significantly impact the cost differences.

Are occupancy costs in Singapore expected to increase in the future?

The future of occupancy costs in Singapore is influenced by several factors, such as market trends, demand-supply dynamics, and economic conditions.

While it is challenging to predict future occupancy costs accurately, experts and real estate analysts regularly monitor these factors to provide insights into potential changes.

What impact do occupancy costs have on businesses in Singapore?

Occupancy costs can have a significant impact on businesses in Singapore.

High occupancy costs can increase the overall cost of doing business, affecting profitability and financial stability.

It is crucial for businesses to carefully assess and manage their occupancy costs to maintain a sustainable and competitive advantage.

How can businesses optimize their occupancy costs in Singapore?

To optimize occupancy costs in Singapore, businesses can consider various strategies.

These include negotiating favorable lease terms, exploring alternative locations, optimizing space utilization, and implementing cost-saving measures in areas such as energy consumption and facilities management.

What is the significance of occupancy costs for investors and landlords in Singapore?

Occupancy costs play a crucial role for investors and landlords in Singapore.

High occupancy costs can attract quality tenants, improve rental yields, and enhance the overall value of the property.

Investors and landlords need to optimize their properties’ attractiveness and value by carefully managing occupancy costs and offering competitive rental packages.

How does Singapore's office occupancy costs compare to other global cities?

Singapore’s office occupancy costs can vary compared to other global cities.

Factors such as location, demand-supply dynamics, and market conditions influence the comparisons.

However, Singapore is known for having competitive office occupancy costs in the Asia Pacific region, attracting both local and multinational companies.

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