SINGAPORE: Higher office rents are forcing smaller firms to move away from the city centre into industrial areas.
One real estate agent told CNA that as much as 20 per cent of his clients have moved out of town over the past three years, as they seek more affordable options elsewhere.
The trend is expected to continue, as firms in weaker sectors, such as cryptocurrency and consumer banking, may consider giving up their office space too, said observers.
INDUSTRIAL SHIFT
Working spaces in Singapore’s industrial estates tend to attract smaller firms and younger generation entrepreneurs, such as those in e-commerce and renovations.
Interior design firm Le Home Interior is currently renting a space in the Tai Seng industrial estate for about S$2,800 a month.
Its director Benjamin Loo told CNA that before the COVID-19 pandemic, it cost about S$1,900 to S$2,000 per month, before rising to its current price.
“There’s a unit directly beside us that’s actually renting out at S$2,900,and there’s one on level one asking for S$3,100 to S$3,200 to close the deal,” he said.
Mr Loo, who is also a real estate agent, said he believes office rents will continue to rise in the coming months.
Prices in industrial estates, however, are still expected to remain more affordable compared to renting a workspace in more central locations.
Typically, only businesses in sectors like manufacturing, warehousing, IT and research can rent spaces in such industrial spaces, analysts told CNA.
Mr Lee Sze Teck, senior director and head of research at Huttons Singapore, said that only bigger production companies, such as news companies, have offices in the central business district (CBD).
“For smaller businesses, the rental cost will not make sense for them. They would rather be in a place that’s more economical for them,” he said.
Source: CNA
