Cushman & Wakefield’s Prepped Cities Index ranks state of preparedness of cities based on Built Environment and Governance & Environment factors
Singapore, 15 November 2018 – Singapore is Asia Pacific’s most prepared city in 2018, followed by Melbourne and Shanghai, according to ‘The Prepped Cities Index’, Cushman & Wakefield’s inaugural report that assesses the current state of preparedness of 17 major business centres in the Asia Pacific region based on a wide range of macroeconomic, structural, defensive and social indicators, including factors in the built environment.
The Prepped Cities Index looks at eight indicators to identify which cities are best prepared to prevent and manage a crisis against future uncertainty. The indicators include the Built Environment (Rental Volatility, Obsolescence, and Sustainability) and Governance & Environment (Governance, Terrorism, Talent, Susceptibility).
Singapore scored well in the areas of Sustainability and Governance, but was outranked by other APAC cities in its ability to attract and retain talent, as well as the level of office rental stability.
Chart: Preparedness Ranking for 17 major business centers in Asia Pacific (Source: Cushman & Wakefield Research)
Almost two thirds, or 64 per cent of Singapore’s Grade A commercial buildings have attained Green Mark certification, accredited by the city’s Building & Construction Authority. The high concentration of sustainable Grade A buildings means that a good majority of Grade A occupiers and investors are better placed to defend against major environmental incidents. It also means Singapore’s built environment in the core CBD is operating efficiently. Singapore outranked other major cities such as Hong Kong and Tokyo in this aspect.
Christine Li, Senior Director and Head of Research at Cushman & Wakefield said “Singapore’s Grade A CBD core is largely owned by institutional investors and this guarantees, to a high degree, the level of commitment to upgrade assets to ensure that they remain attractive to tenants. Environmental sustainability is a major feature in any asset upgrade and that accounts for Singapore’s high score in its ability to manage costs associated with energy and water consumption”.
Singapore ranked number 1 in the region for the government’s ability to provide multinational companies a stable business operating environment, putting in place a clear and stable policy setting in which businesses can operate as well as its ability to respond effectively in the event of an incident.
Talent and rental stability are two areas in which Singapore saw lower scores compared to other cities in the region. Singapore is challenged by low population growth, and a gap in companies being able to introduce market-leading workplace strategies to retain and attract the best available workforce, compared to other cities like Melbourne and Shanghai.
Singapore’s core CBD office supply shortage and the resultant rental growth present challenges for occupiers as it limits companies’ ability to hedge against sudden rises in rents, impacting company performance.
Ms Li said “Singapore’s rental market is closely tied to its open economy, as evidenced by the impact of global events like the Global Financial Crisis and the Eurozone Debt Crisis on Singapore’s economic growth. Its open economy contributes to shorter rental cycles and leases of two to three years on average compared to other cities like Sydney where rents stay stable for longer. One way to help alleviate rental volatility is through the provision of regular and sufficient new supply.”
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