Category Archives: Singapore Office

40-storey CapitaGreen office development officially opens

CapitaLand’s new office development in the Central Business District, CapitaGreen, officially opened on Wednesday (Sep 9), after the 40-storey premium Grade A office building was completed in December last year.

With a focus on sustainable development, CapitaGreen has features such as a green facade covered by living plants, and a rooftop wind scoop, which contributes to cooling the building naturally.

Tenants at CapitaGreen include several multinational companies, such as Bordier & Cie, China Life Insurance, Fitness First, Lloyds Banking Group and Schroders Investment Management. Currently, aggregate committed occupancy stands at an estimated 83 per cent, or 583,200 square feet of total net lettable area.

CapitaGreen won the Best Tall Building Award for Asia and Australasia Region 2015, and was awarded the Universal Design GoldPlus and Green Mark Platinum by the Building and Construction Authority.

The building is jointly developed by CapitaLand, CapitaLand Commercial Trust and Mitsubishi Estate Asia.

Source : Channel NewsAsia – 9 Sep 2015

Prospex owner selling whole building instead of strata sales

The Prospex, a nine-storey commercial building in Bugis, has been put up for sale by private real estate investment firm Pamfleet Group with an asking price of S$80 million or S$1,913 per square foot (psf) of gross floor area.

The move to sell the entire building through an expression of interest (EOI) rather than to stick to the original plan of selling strata units came amid recent sluggish office strata launches in the market.

Approvals have already been granted for strata sub-division for a combined area of 30,807 sq ft. The site spans about 5,264 sq ft with an approved gross floor area of 41,806 sq ft. But CBRE, the sole marketing agent for the property, said that the change of plans followed unsolicited requests for the purchase of the whole building from owner-occupiers and investors, both local and overseas.

According to CBRE executive director for investment properties Jeremy Lake, the response was strong from industries that included legal, design, corporate communications, IT, education, and finance.

Pamfleet group chief executive Andrew Moore said that since the completed facade was unveiled close to the property obtaining its temporary occupation permit, there has been strong interest from companies looking to use it as a corporate headquarters.

“The new buyer could also explore using part of the premises for owner-occupation and lease out the rest of the space, or even make use of the subdivided titles to sell some units individually,” Mr Moore said.

No space is leased out yet in the property, though Pamfleet said that there has been tenant interest to rent the office space at about S$8 psf, and the retail space could see rents in excess of S$25 psf.

After Pamfleet acquired The Prospex – its first property here – at S$45 million in April 2013, it made major alterations and additions to the building to achieve the current modern look. The renovations were completed last month and the EOI closes on Oct 23. The 99-year leasehold property has a balance tenure of 58 years. It has two levels of retail podium and is located at the intersection of Victoria Street and Middle Road, hence boasts high visibility and proximity to the Bugis MRT station. It is near the Bugis Junction, the InterContinental Hotel, the National Library and integrated developments South Beach and DUO.

Mr Lake noted that all CBD buildings transactions over the past year have been in excess of S$200 million, making this property in Bugis a “valued opportunity to purchase a commercial building in the CBD at an attractive price”.

Elsewhere, owners of two adjacent buildings at Cecil Street – ICS Building (the former Aviva Building) and Cecil House – were said in July to be mulling putting up their properties for sale in view of the struggling strata-sales market, which has been in a decelerating mode.

Slowing rental growth, toppish prices, and competition for buyers have plagued the 259-unit GSH Plaza (the former Equity Plaza) in Raffles Place where some 60 units are said to be sold since April with 11 caveats lodged at a median price of S$3,082 psf, and the 86-unit Crown at Robinson (the former Chow House) at Shenton Way where eight caveats have been lodged at a median S$3,528 psf.

But Colliers International is expecting transactions to pick up in the second half, led by the release of new units in these two projects and possibly the launch of Woods Square in Woodlands. About 48 caveats were lodged for new strata-titled office sales in the second quarter, up from eight caveats in the first quarter.

Source: The Business Times

Perennial gets go-ahead to enhance TripleOne Somerset, AXA Tower

Local property group Perennial Real Estate Holdings said on Tuesday (Aug 4) it has received planning permits for proposed enhancement works at TripleOne Somerset and AXA Tower.

The plans for TripleOne Somerset, a predominantly-office cum retail development off Orchard Road, include increasing the retail area and converting up to 32,000 square feet of gross floor area into medical suites. Perennial also intends sell office space by dividing the area into smaller strata units, commencing with one office tower.

As for AXA Tower in the Shenton Way area, the enhancement involves increasing total net lettable area by 85,000 square feet to about 760,000 sq ft.

The retail area at level 1 and basement 1 will be enlarged, and a new two-storey annex block will be built to house medical suites. The firm also intends to strata sale the office spaces to maximise the value of the prime asset.

Perennial focuses primarily on large scale mixed-use developments in China and Singapore. Besides TripleOne Somerset and AXA Tower, its other Singapore properties include CHIJMES and Capitol Singapore. The group also holds stakes in and manages 112 Katong mall and Chinatown Point mall.

Source : Channel NewsAsia – 4 Aug 2015

Thong Sia Building along Orchard Road sold for S$380 million

Thong Sia Building located opposite The Paragon in the Orchard Road shopping belt has been sold to SIN Capital Group for S$380 million, marketing agent JLL said in a news release on Wednesday (Jul 29).

This works out to S$2,430 psf over the existing gross floor area for the freehold building. The 26-storey building was built in 1981 and has a land area of about 21,602 sq ft. It currently comprises seven levels of commercial space and a 19-level residential tower of 37 apartments.

JLL’s International Director Karamjit Singh, who brokered the deal, said “the planning authority has advised that they are prepared to support the redevelopment of the site into a mixed residential and commercial development with at least 60 per cent of the space set aside for residential or serviced apartments”.

He added that this is the first collective sale this year and the largest ever mixed use collective sale in Singapore. The completion of the sale is subject to the approval by the Strata Titles Board.

Source : Channel NewsAsia – 29 Jul 2015

Prices of office space up, retail space down in Q2: URA

Prices of office space rose 0.3 per cent in the second quarter compared to the previous quarter, while prices of retail space fell 0.5 per cent, the Urban Redevelopment Authority (URA) said on Friday (Jul 24).

Rentals of office space fell 2.6 per cent in the second quarter, compared with the 0.6 per cent increase in the first quarter. Rentals of retail space decreased by 0.5 per cent, compared with the 0.3 per cent decline in the January to March period.

As of end-June, there was a total supply of about 962,000 sqm gross floor area of office space from projects in the pipeline, and a supply of 774,000 sqm of retail space, URA said.

The amount of occupied office space increased by 38,000 sqm, compared to the 19,000 sqm increase in the previous quarter, while occupied retail space remained unchanged. The stock of office space increased by 8,000 sqm, while retail space increased by 25,000 sqm.

The islandwide vacancy rate of office space at the end of second quarter fell to 9.8 per cent, from 10.2 per cent at the end of the first quarter. Vacancy rate of retail space rose to 7.2 per cent, up from 6.8 per cent in the previous quarter, URA said.

Source : Channel NewsAsia – 24 Jul 2015

158 Cecil Street sold for S$240m

A company linked to low-profile investor Denis Jen, who owns shopping malls in Australia, is buying 158 Cecil Street for S$240 million from a fund managed by Alpha Investment Partners, the fund management arm of Keppel Land.

The price works out to about S$2,100 per square foot based on the 14-storey building’s net lettable area of around 115,000 sq ft. 158 Cecil Street is on a site with a balance lease term of around 65 years.

Formerly known as The Spazio and Dapenso Building, the property underwent a major revamp several years ago.

Alpha acquired the property for S$235.5 million in 2007 from KOP Properties, which agreed to complete a major refurbishment before delivering the property in 2009 to Alpha, which positioned the asset as a green building.

158 Cecil Street has bagged a number of accolades, including the top prize at the 2011 Skyrise Greenery Awards, organised by the Singapore Institute of Architects and the National Parks Board.

Late last month, a company controlled by Mr Jen was granted an option to buy the property at S$240 million. According to information listed by Forbes in the past, Mr Jen is a China-born orphan who studied law in Shanghai. He made his first fortune in textiles in Taiwan and Hong Kong and relocated to Singapore, then Australia, where he bought and sold businesses and built a small real estate empire of five shopping malls.

His businesses include Jen Retail Properties, the website for which states that it is a privately owned family company established as Intro International Limited in 1991 in Brisbane. Mr Jen is a Singapore citizen.

Prior to the option to purchase 158 Cecil Street was granted to a Singapore-incorporated vehicle of Mr Jen, several other parties seriously looked at potentially acquiring the asset.

Tenants of 158 Cecil Street include Facebook, which will soon move out to South Beach Tower but which market watchers suggest may retain some space at its existing premises, Bank of India and Zurich Insurance. Airbnb signed up as a tenant recently.

Source : Channel NewsAsia – 21 Jul 2015

Singapore new office leases drop by half as companies cut costs

Singapore’s new office leases declined by more than half as tenants such as Barclays Plc gave up space, while companies including Google Inc moved out of prime office districts to cut costs.

The proportion of new leases dropped to 6 per cent of all signed in the first six months from 15 per cent a year earlier, according to the latest figures compiled by commercial-property broker Cushman & Wakefield Inc.

“Companies have become less optimistic about the outlook,” said Sigrid Zialcita, managing director of Asia- Pacific research at Cushman in Singapore. “There are a growing number of tenants gravitating to non-core, Grade-A buildings and business parks due to lower rents and ample space options.” The city-state’s economy, heavily reliant on exports, is staring at a rough patch. Exports fell for the first time in three months in May and business costs have been rising since the government slowed the inflow of foreign workers in 2010. Employment shrank in the first quarter as manufacturing and construction jobs fell.

Chief financial officers in Singapore are the most pessimistic in the region about profits this year, according to a survey by Bank of America Merrill Lynch. In the poll of 630 CFOs, 53 per cent of those in the city-state said they expect earnings to decline in 2015.

Cushman estimates a combined 869,000 square feet of prime-office space, which commands higher rents, will become available as financial services firms move out of the central business district over the next six months.

More than 300,000 square feet was vacated by new technology firms in the year ended March, the broker said. Companies said lower rents gave them flexibility to expand and freed up capital for other expenses or for hiring, it said.

Google is moving to Mapletree Business City II, a business park on the city’s fringe, from Asia Square Tower 1 in the CBD, cutting the rent by half, Cushman said.

Banks including Barclays, Standard Chartered and Credit Suisse Group are consolidating operations in existing offices.

Standard Chartered gave up four of its 24 floors at Marina Bay Financial Centre as it sought to bring together workers from eight locations to two main offices at Marina Bay and Changi Business Park, according to Nick Hughes, head of corporate real estate services for Singapore and the ASEAN region.

Barclays, Credit Suisse Barclays will vacate two of its three floors at One Raffles Quay South Tower when its lease expires next month and move employees to its offices at Marina Bay Financial Centre Tower 2, John Mcguinness, a spokesperson for the bank said.

Credit Suisse is bringing together operations from multiple sites to two main locations – One Raffles Link in the CBD and ONE@Changi City on the outskirts – that will accommodate the majority of its Singapore-based staff, a move the bank flagged in 2011 when it set up the Changi office.

Office rents peaked in the first quarter as Singapore’s economic growth showed signs of tapering.

Grade-A office rents in the CBD could slide 14 per cent over the next two years to S$9.12 per square foot a month from S$10.60, Cushman estimates, as four million square feet of prime office space will be added next year.

“What’s contrasting is that more than half the relocations this year were a flight to value, where companies signed up contracts in cheaper buildings,” Mr Zialcita said. “This is a big turnaround from 2014, where flight to quality was the main theme driving office leasing, with 71 per cent of the space signed up in newer and more expensive buildings.”

BLOOMBERG Jul 10, 2015

Office rents in CBD remain sluggish in Q2: DTZ

Average office rents in the Central Business District (CBD) area in the second quarter of the year stayed flat quarter-on-quarter at S$10.85 per sq ft, property consultant DTZ said in a news release on Wednesday (Jul 1).

According to DTZ, the slowdown in rental growth was also a result of slower demand in the face of uncertain global situations such as the risk of a sharp correction in China’s real estate market, or the possible default and exit of Greece from the Eurozone. However, it said the net demand growth in the CBD was still positive.

In H1 2015, net demand was 526,000 sq ft, almost 90 per cent higher than the 277,000 sq ft registered in H2 last year. Office occupancy in Raffles Place grew the most by 4.1 percentage points to 96.6 per cent and occupancy rates in the Beach Road/North Bridge Road micromarket inched up by 0.7 percentage point in Q2, DTZ added.

As for the average monthly gross rents in Marina Bay, it remained the highest at S$13.75 per sq ft, followed by Raffles Place at S$10.80 per sq ft, it added.

While rents were supported by the lack of new completions for the rest of 2015, DTZ said leasing activity was modest on the back of the 4.45 million sq ft of pipeline supply in 2016. Major 2016 developments in the CBD include Guoco Tower, Marina One, and Duo Tower totalling about 3.3 million sq ft.

Ms Cheng Siow Ying, DTZ’s Executive Director of Business Space, said: “With a large supply coming on board in the second half 2016, firms will have more premium and Grade A office options in the CBD and fringe locations.

“Some firms may take this opportunity to relook and strategise consolidation or expansion plans, while others may employ a wait-and-see approach through the supply wave of 2016. Notwithstanding, prime office space is still likely to command a premium, especially for iconic developments like Marina One and Guoco Tower.”

Source : Channel NewsAsia – 2 Jul 2015

Second commercial site at Woodlands released for sale

The Urban Redevelopment Authority (URA) on Tuesday (Jun 30) released detailed sales conditions for the second commercial site at Woodlands Square. The land parcel is available for sale under the Reserve List of the first half 2015 Government Land Sales (GLS) Programme.

The second commercial site will be in the Woodlands Regional Centre and will sustain the development momentum of the precinct as a key commercial cluster outside the city.

The area comprises of two distinctive districts and “will be transformed by the upcoming commercial developments at Woodlands Central and the mixed use business cluster in Woodlands North Coast”, said URA.

When fully developed over the next 10 to 15 years, the Woodlands Regional Centre will offer about 100,000 new jobs and have about 700,000 square metres of commercial space.

The proposed development on the sale site will have at least 60 per cent of the maximum Gross Floor Area – 47,009 sqm – dedicated for office use. Up to 8,000 sqm of GFA can be set aside for retail as well as food and beverage uses, added URA.

There will also be a pedestrian mall which will connect the existing MRT and bus interchange to Causeway Point and Woodlands Civic Centre.

The first commercial site in Woodlands Regional Centre is currently under construction.

Source : Channel NewsAsia – 30 Jun 2015

Park Mall to be redeveloped into commercial complex with office blocks

Park Mall will be redeveloped into a commercial development comprising two office blocks with an ancillary retail component, the building’s owner said on Monday (Jun 29).

This follows the sale of the office and retail complex at Penang Road near the Orchard Road shopping belt for S$411.8 million, Suntec Real Estate Investment Trust (Suntec REIT) said in a statement.

The new buyer is a joint venture company, Park Mall Investment, in which Suntec REIT has a 30 per cent stake.

The other shareholders of the joint venture are the SingHaiyi group, a property firm with interests in the US and Singapore, and a firm linked to Mr Gordon Tang, who is a non-executive director of SingHaiyi.

Park Mall, which has a large number of lifestyle and home furnishing shops, is more than 40 years old. It has a remaining land lease tenure of 53 years. Suntec REIT acquired Park Mall in 2005 for S$245.1 million.

Mr Yeo See Kiat, chief executive officer of Suntec REIT’s management company, said the divestment will allow Suntec REIT to free up capital for other investments and provide greater financial flexibility.

“The redevelopment will unlock the underlying value of the property by further enhancing the gross floor area of the site. In addition, Suntec REIT will have the ability to own part of the redeveloped property by acquiring one office block upon completion,” he added.

Source : Channel NewsAsia – 29 Jun 2015