Singapore’s Office Space Industry is showing strong signs of recovery after the global downturn experienced over the past few years. Construction activity is picking up after a long slump, while residential and commercial properties are enjoying attractive pricing from traditional property speculators, and are soon to begin their climb towards international standards. As the government continues its ambitious infrastructure programme, the future for Singapore as a leading business destination looks bright. This is a period of time when international companies looking to establish operations in a country like Singapore should be optimistic about the prospects for success in the country. Over the past few years, Singapore has consistently outperformed other major business destinations in terms of business growth and consumer spending. With the right set of policies and procedures in place, this can only continue.
Singapore government policy of encouraging economic growth in the country is perhaps the single most important factor behind the positive outlook in Singapore’s economy. The creation of a tax-efficient business environment, and the implementation of small and large-scale infrastructure projects have helped to ensure that the government has the money available to encourage entrepreneurs. The increase in the number of new establishments and the continued diversification of services provided has given the country a much needed competitive advantage. In addition, the government’s efforts to attract tourists, despite the recent recession, have seen a sharp response from businesses looking to tap the enormous potential of the tourist market in Singapore.
Singapore’s Office Space Industry has also taken time to adapt to changes in the way business is conducted. There are now more online offices and telecommuting than there used to be, and the growth rate of this sector has been swift since the start of the current recession in the global economy. The rapid growth of this sector is expected to continue, and is contributing to Singapore’s recovery from the global recession. In fact, it is this increase in office space that is expected to lead the economy back towards higher growth in the years ahead. With this forecast in mind, it is easy to see how the office market in Singapore has begun to pick up, and how this is expected to continue as the global economic recovery gathers strength.
The primary drivers behind the rise in Singapore property prices are improvements in infrastructure, the growing need for business space, and improvements in commercial property management. Improved infrastructure has allowed more companies to meet their needs at lower costs, allowing them to offer lower pricing to their customers, both domestic and international. As the demand for commercial property increases, the development of new office sites will also be facilitated. These developments will provide space for companies to further expand their operations, either through the purchase of additional office space, or by the provision of modular offices, which are supplied to a pre-determined number of clients. As the economy picks up, the need for additional commercial property will become even more significant, and prices will begin to reflect this.
Over the last decade, Singaporean firms have developed both an expertise in dealing with overseas clients, but also in designing and managing their own offices. Many of these firms now outsource their office space requirements to larger international firms that have significantly more experience and knowledge in dealing with the specific demands of such operations. This has allowed Singapore’s companies to become the preferred choice for many international offices. However, as with any successful market, the office market in Singaporean has begun to attract more firms which may require some of the services and facilities that Singaporean firms tend to offer, with an aim to tap into the larger market.
Over the last decade, the number of new office building construction projects in Singapore has far exceeded the number of expansions needed to keep up with the demand for such commercial properties. This has led to the construction of a number of skyscrapers in the city-state, with an aim to support the continuing growth of the economy. The increased value of real estate and the number of prestigious projects in the country have led to an increased demand from international investors. This has been supported by the government’s continued support for the country’s economy, with the injection of large-scale infrastructural investments.
The increase in the number of international companies looking for Singapore office space comes at a time when the market remains stagnant or slightly declining in terms of overall growth. However, while this is generally good news for the country’s economy, it also highlights the need for businesses to address the issues affecting its economy. One of these concerns relates to the oversupply of office space in Singapore. While it may be good news for companies looking for a permanent home here, it may also lead to the demand for such property depleting over time. In a similar vein, given the relatively high cost of commercial property in Singapore, companies may find it difficult to source pre-construction properties at the right price. As a result, the slowdown in the market may affect the timing of one’s Singapore office options decisions.
However, with the onset of this latest recession in the global property market, firms dealing in commercial property are bracing themselves for a slowdown in the Singapore office market. Some companies are already scaling back their operations in Singapore. Even as Singaporean property prices come into the spotlight more, the impact on the country’s economy remains unclear. One thing is clear though – a constant influx of new tenants in Singapore will likely slow or halt any recoveries seen in the market today. While there is no definite forecast for the Singapore office market, it is clear that many firms are waiting for the “perfect storm” to hit the Asian giant before they decide to expand into Singapore. Given these factors, the imminent arrival of the world’s first high-tech airport is only going to make things more complicated for the business community.