In the past three to four years, many multinational companies have been looking towards North Asia, focusing their business efforts in China, Japan, and Korea, as well as India in South Asia. Recently, however, with the South East Asian economies stabilising and the continued strengthening of trade relationships within this sizeable region, foreign investors who have previously neglected this area are returning again.

Mr Michael Ng, Managing Director of Savills (Singapore) Pte Ltd, points out that to penetrate into the South East Asian region, these foreign investors will likely choose to set up in Singapore due to its excellent infrastructure and well developed communication network. Moreover, with the current supply of office space at about 700,000 sq ft to 800,000 sq ft and demand outstretching supply by 200,000 to 300,000 sq ft in an average year, there could be a shortage of Grade A offices in the coming years. In a good year, demand could go up to one and a half to two million sq ft.

In addition, the two integrated resorts to be built in Singapore will bring in about five billion dollars worth of investment. With the additional benefits and spin-offs resulting from the development of these integrated resorts, South East Asia is slated to become very lively in the near future.

These increasing activities will in turn see a stable and healthy demand for offices locally.

Mr Ng adds, “At the moment, it is very difficult to find a Grade A office. Much of the current supply has been booked. At the same time, rental for Grade A offices is now approximately $4.50 to $4.60 psf per month. For a small office of about 700 to 800 sq ft, rental goes for about $5 to $6 psf per month. I expect rental rates to improve within the next 12 to 18 months.”