Singapore’s soaring property costs might hinder tech growth

SINGAPORE: Singapore’s tech scene is booming, but recent data suggests that soaring property costs might hinder its growth.

According to CBRE, the city-state has become a magnet for tech talent, with a 5% surge in tech employment from 2019 to 2023, solidifying Singapore’s status as a “powerhouse” for tech talent.

Singapore Business Review reports that the latest figures indicate that the number of tech talent occupations in Singapore ranges between 200,000 and 300,000, making up approximately 30% of the total workforce.

CBRE attributes this success to Singapore’s mature tech ecosystem, stable regulatory framework, and easy access to capital.

However, Singapore’s average annual office rent is a staggering US$104 (approx. S$141.60) per square foot (psf), the highest globally. Even the average salary of a software engineer in Singapore is around US$100,000 (approx. S$136,152).

Despite these challenges, in 2023 alone, Singapore secured 5.5% of the global venture capital (VC) tech funds, totalling about US$20 billion through approximately 400 VC deals.

Impressive, right? Especially considering that 81 deals were in artificial intelligence (AI).

CBRE states, “Tech companies are drawn to large talent pools, the premier education and research institutions, establish capital funding networks, amenity-rich cities like Singapore.”

But, tech companies in Singapore face hefty costs on property and talent costs. “As a result, smaller markets have seen increased tech industry activity and investment,” they added.

CBRE underscores that for many companies, the primary consideration is the availability of skilled workers, highlighting the importance of talent in location decisions. /TISG

Read also: Ernst & Young: Tech sector is “brighter than 12 months ago” as businesses eye AI company acquisitions