Singaporean companies are relocating their offices to less expensive Grade-A spaces situated in city-fringe locations in search of better value, according to a research paper by Colliers International named “City Fringe Gems.”
The study found that in the third quarter of 2019, the average rental for Grade-A offices in city-fringe locations was $7.90 psf per month (pm), compared to an average of $10.08 psf pm in the CBD.
The report indicates that there has been an 18.4% surge in Grade-A office rents in city-fringe areas between 2Q2017 and 3Q2019, driven by favorable demand-supply conditions. Moreover, the rental gap between the city-fringe locations and the CBD has widened from 8% in 2011 to 22% presently.
Tricia Song, Colliers International’s head of research for Singapore, stated that business locations in the city fringe have become increasingly attractive due to government and developer-led urban regeneration efforts and the development of new buildings.