Hong Kong, Singapore Office Rents to Drop at Least 15%, JLL Says

Hong Kong and Singapore commercial property rents and prices will drop by more than 15 percent in 2012 as financial services companies keep a lid on growth or shrink, according to Jones Lang LaSalle Inc.

Hong Kong rents will drop by 15 percent this year and prices by 16 percent, while Singapore rents will fall 11 percent and values 20 percent, Alastair Hughes, Asia-Pacific chief executive officer of the world’s second-biggest publicly traded commercial-property broker, said at a presentation in Sydney.

Global firms have become more mindful of costs amid Europe’s sovereign debt crisis, with companies including Royal Bank of Scotland Plc, Macquarie Group Ltd. and Daiwa Securities Group Inc. among the latest to announce job cuts in the Asia-Pacific region.

Office rental growth slowed to 0.9 percent across the region in the quarter ended Dec. 31, from 2.5 percent in the previous three months, as rising supply in China and India pushed vacancies higher, Jones Lang LaSalle said last month.

New Delhi will see a 28 percent rise in supply, followed by Shanghai which will add 25 percent more space this year, Hughes said today.

Rents and prices in Beijing and Jakarta will be underpinned by strong economic and revenue growth, he said.

“We’ve had a synchronized downturn, but a variable recovery,” Hughes said. “Some values are growing, like in China and Indonesia, some are flat, like in Tokyo and Seoul, some are falling, like in Hong Kong and Singapore.”