Housing staff: S'pore offers best value for firms

Study: High GDP per capita here makes costlier rents worth the while

By Rachel Scully, The Straits Times, 18 Sep 2013

SINGAPORE came out tops among 10 cities as the best value for money for firms to house their staff.

Despite relatively high rents for residential and commercial space, Singapore offers better value when total accommodation costs are measured against gross domestic product (GDP) per capita, said consultant Savills.

Runner-up in the best-value stakes was Sydney, with Moscow next.

"The value of real estate is higher where more corporate revenue can be generated," said Ms Yolande Barnes, the director of Savills world research.

"(Absolute) per square feet office rents are a misleading indication of the total real estate costs faced by relocating companies.

"In other words, it is worth paying more to accommodate an executive team in Singapore with its high GDP than (in Mumbai)."

Ms Barnes has taken GDP per capita as an indicator of the potential for income for businesses locating there.

Traditionally, firms often look at the total costs of renting an office and a home for staff.

When using a total cost measure, Singapore came sixth out of the 10 most expensive cities, in the Savills report, behind Hong Kong, the costliest, and New York, London, Paris and Tokyo.

Savills said it would cost US$1.005 million (S$1.27 million) a year in office and residential rents to house two seven-member teams of a start-up in a prime financial district and a secondary location in Singapore.

Each team would comprise a chief executive, senior expatriate director, locally employed director as well as four administrative and support staff.

The total accommodation costs of housing the 14 staff in Hong Kong would be almost four times those of Mumbai.

But when rents are measured against GDP per capita, it is better value for money to relocate the business to Hong Kong instead.