Tag Archives: Marina One

Marina One gains from ‘flight to efficiency’

PRE-COMMITMENT leases and rents for upcoming prime offices are picking up as occupiers are warming to these upcoming swanky buildings with large floor plates in a “flight to efficiency”.

Swiss private bank Julius Baer has signed a lease at close to double-digit rent for a “high density floor” spanning 100,000 square feet at Marina One. Julius Baer is slated to give up its 72,000 sq ft of space spread over two floors at Asia Square Tower 1 when it moves into Marina One, which will be completed next year.

At another integrated project, Tanjong Pagar Centre, a recent flurry of office leases inked has raised Guoco Tower’s pre-commitment leases to over 70 per cent for its 890,000 sq ft of prime Grade-A office space. This signals a remarkable pace since January when the pre-commitment level was only 10 per cent.

Effective rents at Guoco Tower have also ranged from S$7.50 per square foot per month (psf pm) to over S$10 psf pm, according to sources.

Developers of Marina One and Tanjong Pagar Centre, M+S and GuocoLand respectively, declined to comment on their leasing deals nor offer rental details.

But BT understands that ING, which now occupies 70,000 sq ft at Republic Plaza, is in advanced negotiations for a similar amount of space at Guoco Tower.

Sources also said that Guoco Tower had of late secured tenants such as Palo Alto Networks, which is moving out of its 20,000 sq ft space at Millennia Towers to take up some 36,000 sq ft at Guoco Tower.

Itochu Singapore, currently at Republic Plaza, is taking up 28,000 sq ft at Guoco Tower, while Amadeus, a global IT solutions provider for the travel industry that now occupies over 20,000 sq ft at Parkview Square in North Bridge Road, is said to be taking up a lease for 36,000 sq ft at Guoco Tower.

Meanwhile, the new UIC Building has just secured its first pre-commitment lease from JustOffice, which will open serviced offices there spanning 40,000 sq ft.

Such steady absorption marks good news for the market amid the completion of some 3.5 million sq ft of new office space within the next 12 months. But market watchers note that effective rents for most leases inked are still in the single-digits for prime Grade-A office in the CBD after factoring in incentives such as rent-free periods.

“With economic uncertainties and businesses not growing, rents will be kept in check,” said Calvin Yeo, head of office at Knight Frank. Recent leasing activities have been driven by upcoming lease expiries, which will soon free up a lot of secondary space especially in older buildings.

Data from Cushman & Wakefield shows that the weighted effective rents in Marina Bay area stood at S$9.56 psf pm in the second quarter, a 27.7 per cent fall from the Q1 2015 peak, while that in the Shenton Way/Tanjong Pagar area was S$7.65 psf pm, about 10.1 per cent below the Q1 2015 peak.

Cushman & Wakefield research director Christine Li observed that over the last three decades, weak office absorption seems to happen only when there is a crisis. “In the absence of an external shock, the office absorption tends to be quite stable despite periods of high office supply. This could imply that the underlying demand for office space in Singapore is still healthy, and the city state always has the capacity to absorb the supply over time.”

With office tenants relocating from older buildings into newer and more efficient ones, CBRE executive director for office services Michael Tay projects a rental trend divergence.

While rents in new buildings will edge up, older buildings will have more competitive rents in the next 12-18 months, Mr Tay said. Commenting on Guoco Tower, he noted that its retail, hotel and F&B offerings as well as a direct link to the MRT are attractive to tenants.

Large floor plates in new developments are a draw for companies seeking workspace flexibility and efficiency, industry players noted. Duo Tower, an M+S project, offers the largest floor plate in the Bugis micro-market of up to 31,000 sq ft; Guoco Tower’s column-free floor plates span 27,000 to 30,000 sq ft.

Marina One’s typical floor plates range from 34,000 to 40,000 sq ft – among the largest available in Marina Bay.

There are two high density floors on the 28th and 29th floor of Marina One, measuring some 100,000 sq ft each and 170 metres long. Offering good views of the sea, each high density floor is able to accommodate more than 2,000 people.

This offering follows closely the popularity of “superwide” office spaces spanning 100,000 sq ft or more – the horizontal equivalent of the supertall high-rises – that have sprouted across Manhattan. These “superwide” office spaces are untested in this part of the world, with Marina One probably the only prime Grade-A office building in Asia to have high density floors.

But its success could stoke interest among other developers to provide such offerings in the future, said M+S CEO Kemmy Tan. So far, enquiries for such vast floor plates stem from global companies across sectors.

“These leasing activities are not just a flight to quality but a flight to efficiency,” Ms Tan said. “The larger floor plates allow companies to be more efficient in their space planning instead of straddling over several floors.”

In M+S’s last official update in June, signed leases and those under documentation exceeded 550,000 sq ft, out of Marina One’s total prime Grade-A office space of 1.88 million sq ft.

Ms Tan pointed out that recent leases inked for new developments are not just a case of companies playing musical chairs but a reflection of “green shoots” in the office market, with some companies “upsizing” their operations as opposed to others that are reportedly shrinking their office space and headcount.

Marina One tops out, secures 550,000 sq ft of office leasing deals

M+S Pte Ltd, a joint venture between Malaysia’s Khazanah Nasional and Singapore’s Temasek Holdings, said on Tuesday it has “topped out” (meaning put the top of the building on) Marina One in Singapore’s Marina Bay area.

Indoor furnishings are not yet completed, however, and the development remains on track for completion in 2017.

It added that it has secured strong office leasing pre-commitments of over half a million square feet, details of which will be announced soon.

“These are some of the largest office leasing deals in 2016 and we continue to be in active negotiations with many other multinational companies who are looking at securing office spaces over multiple floors,” said Kemmy Tan, chief executive officer of M+S. “Prospective tenants are taking this opportunity to move into Marina One as it is the only new development in the prime central business district that offers excellent connectivity, efficient floor plates, and lush green biodiversity at the heart of the development.”

The signed leases, together with those under documentation, will bring Marina One’s take-up to over 550,000 sq ft.

“A few privileged companies will have the rare opportunity to have exclusive sky signs at Marina One, putting their mark onto the signature Singapore skyline,” Ms Tan said.

The 3.67-million-sq-ft development comprises Marina One East and West Towers, two prime Grade-A office towers of about 1.88 million sq ft, 1,042 units of luxurious city residences, 140,000 sq ft of retail space and 65,000 sq ft of greenery.

Major Japanese bank in advanced talks for space in Marina One

DESPITE a generally quiet leasing market, there has been buzz about two big transactions involving major players.

BT understands that The Bank of Tokyo-Mitsubishi UFJ (BTMU) is in advanced discussions to lease about 140,000 square feet of office space at Marina One. It will be moving out of Republic Plaza, where it is the anchor tenant and also one of the oldest in the building, occupying about 150,000 sq ft.

In a separate deal, this one outside the CBD, Johnson & Johnson (J&J) is said to be finalising a lease for at least 170,000 sq ft of business park space at Ascent in Science Park 1 which will be completing this quarter. The lease is understood to be a long-term commitment of 10 years.

The multinational corporation (MNC) is currently based at The Strategy in the International Business Park in Jurong East, where it occupies about 130,000 sq ft. When contacted by BT, a spokesman for Mapletree Industrial Trust, which owns The Strategy, said: “We have not received any notification from Johnson & Johnson on their lease, which expires in 2018.”

However, an analyst said that J&J may have an option to pre-terminate its lease by serving a requisite notice period.

Market watchers suggest that J&J could be paying a gross effective monthly rental of about S$5-S$6 per square foot (psf) at Ascent on a blended basis for the duration of the 10-year lease, compared with about S$3.50-S$3.80 psf it would pay had it chosen to renew its lease at The Strategy. But for the company, the relocation could represent a flight-to-quality to a newer development, with an expansion built in.

“If they remained in The Strategy, there is limited expansion pathway for them,” said a market watcher.

Developed by Ascendas Land Singapore, Ascent is a seven-storey building with a total net lettable area of 490,687 sq ft, of which about 90 per cent is business park space. It is located near Kent Ridge MRT Station and Kent Ridge Park. Ascendas declined to comment on the precommitment rate for the development or about J&J’s lease. The MNC too was mum when approached by BT as was Colliers International, which is understood to have advised J&J.

Back in the CBD, BTMU could be one of the first major office signings at M+S’s Marina One project, say market watchers. When contacted, the bank declined to say where it will be relocating to, but confirmed that it would not renew its lease at Republic Plaza which is due in mid-2017.

“. . . we have reviewed our options and decided to move out of the current premises to a new building. This . . . made the most viable sense for the bank in the longer term – with regards to efficiency of floor plates as well as convenience of location,” said Jenny Lim, BTMU’s head of corporate communications for Asia and Oceania. “We are in the midst of final discussions with the new landlord and thus unable to disclose more details of our move as yet.”

The relocation to a new building involves BTMU, the commercial bank entity under Japan’s Mitsubishi UFJ Financial Group (MUFG) that is currently housed at Republic Plaza. BTMU occupies 13 floors adding up to around 150,000 sq ft at its current premises.

The bank is looking at taking up close to 140,000 sq ft at the new building, and about 1,500 staff will be involved in the move.

While the space it is taking up in the new location is less than what it occupies at Republic Plaza, it does not amount to a contraction of the bank’s footprint or business in Singapore, said Ms Lim. Rather, she said, it reflects the more efficient space usage at the new development, due to bigger floor plates

BT understands that Mitsubishi UFJ Securities, another entity of MUFG and which is also located in Republic Plaza, may join BTMU in migrating to Marina One.

In all, the Marina One development will have 1.88 million sq ft of offices on levels 5 to 30 in two towers. Office floors in the East Tower will range from 35,000 to 43,000 sq ft, while those in West Tower will be 32,000-42,000 sq ft. The two towers will be connected on levels 28 and 29, creating 100,000 sq ft per floor.

It is thought that BTMU could be looking at taking four floors at Marina One. At Republic Plaza – which was completed in early 1996 – floor plates range from around 8,000 to 12,000 sq ft. JLL, which is understood to be advising BTMU, declined to comment.

A spokesman for M+S declined to comment on pre-leasing activity at Marina One.

But industry insiders told BT that gross effective monthly rents for big office occupiers at Marina One would probably be around S$7-S$8 psf. Had BTMU decided to renew its lease at Republic Plaza, it could have expected to pay above S$7 psf, they added.

BTMU’s decision is the latest in a game of musical chairs involving office tenants which began last year when precommitments were inked at Duo along Beach Road (also a project by M+S) and Guoco Tower in Tanjong Pagar – with tenants moving from older-generation premises.

At Duo, Abott has signed a lease for about 100,000 sq ft; it will be consolidating and coming out of three locations – HarbourFront Centre in the Telok Blangah area, VisionCrest along Penang Road and Gateway in Beach Road. MasterCard has inked a 70,000-sq-ft lease at Duo, and is expected to exit Gateway.

Meanwhile, Guoco Tower has clinched Dnb Asia, a shipping and offshore financing solutions provider that is currently housed at the nearby Axa Tower, for a space of about 15,000 sq ft.

“The musical chairs trend already started to emerge last year, although most of the actual vacating of space will happen in 2017 and possibly 2018 because these tenants are precommitting to space in new buildings that will be completed in the second half of this year and early 2017,” said Michael Tay, executive director of office services at CBRE.

Besides attractive rental terms offered by landlords of new developments to select tenants amid the competitive leasing environment, the key drivers for this migration to newer office developments are a flight-to-quality and, in some cases, occupiers consolidating from a few locations.

“There are also tenants that, due to expansion within a building over the years, may have their operations spread in different zones in the building – which is not ideal from an operational standpoint,” noted Mr Tay.

Analysts said that office leasing deals that are brewing are mostly expected to be renewals or relocations, rather than involving new entrants and expansions – translating to little growth, if any, in net demand for islandwide office space. Some foreign banks and tenants in the resources sector are in retreat and the overall weak global economic outlook is also denting office demand. This, coupled with the surge in new office completions over the next year or so, will continue to create downward pressure on rentals.

On a positive note, there are signs that some big occupiers are prepared to move to higher-quality new buildings, incurring capital expenditure – provided the rental level is right, said Mr Tay.

All eyes are now on the the likes of ING, which is also in Republic Plaza, to see if it stays put or moves to a new development. In Centennial Tower, McKinsey & Co is mulling over whether to stay or move.

The World Bank, which is said to occupy about 16,000 sq ft at Marina Bay Financial Centre 2, is being courted by several landlords. The bank is understood to be looking for a bigger space of about 30,000-50,000 sq ft either in the same building or a new project.

Savills executive director (commercial leasing) Marcus Loo said: “There is still keen leasing interest in the market despite the economic uncertainty. However, there is a general sense of disconnect between landlords and tenants’ expectations on rental levels. As a result, decision-making by tenants is protracted.”

Marina One unveils anchor tenants

Marina One announced on Friday that it had secured a strong line-up of anchor retail and food & beverage (F&B) brands that include Virgin Active, Cold Storage and Cookhouse by Koufu, ahead of the Singapore development’s expected issuance of its temporary occupation permit in 2017.

“Anchoring Virgin Active, Cold Storage and Cookhouse as our key retail tenants reinforces Marina One’s vision to be the choice destination to live, work and play in the heart of the Marina Bay financial district. Retailers recognise the potential of Marina One as the only premium integrated development to be completed in Marina Bay in the coming years and moved quickly to secure spaces at Marina One. Our retail strategy will continue to focus on introducing new, refreshing lifestyle and retail experiences which appeal to a sophisticated and cosmopolitan audience,” said Kemmy Tan, chief operating officer, M+S Pte Ltd.

Other tenants include Teppei Syokudo, a renowned and popular Japanese restaurant; Jewel, a “third-wave” specialist coffee house; and 4 Fingers Crispy Chicken. The Marina One store will be 4 Fingers Crispy Chicken’s first venture into the Central Business District.

M+S is owned 60:40 by Khazanah and Temasek respectively. It was set up on June 27, 2011, to develop Marina One and DUO, two integrated developments in Singapore.

Source : Channel NewsAsia – 18 Sep 2015

Marina One set to raise bar for future integrated developments

The Marina One mixed-use development in the heart of Singapore’s Central Business District (CBD) will be a coveted business and lifestyle destination that will raise the bar for integrated developments and act as a catalyst to attract and grow new businesses.

That is the vision of M+S, a joint venture company owned by Malaysia’s Khazanah Holdings Bhd and Singapore’s Temasek Holdings, that is working on the landmark project.

M+S also said Marina One, designed by world renowned architect Christoph Ingenhoven, marks a brand new chapter in the Marina Bay Masterplan.

Its design was unveiled on Tuesday by Singapore’s Prime Minister Lee Hsien Loong and his Malaysian counterpart, Mr Najib Razak, who are holding their Leaders’ Retreat.

M+S said Marina One will be completed in 2017, with a gross floor area of 3.67 million square feet and is valued at S$7 billion.

It consists of Marina One Residences, Marina One Offices as well as a retail podium.

Marina One Residences comprises two towers of 1,042 luxury city residences, ranging from one- to four- bedroom units, including penthouses. These will be launched in the second half of the year.

Marina One Offices — with east and west towers — offer 1.88 million square feet of prime office space.

Its crown jewels will be two 100,000 square feet office floor plates, one of the largest in Asia.

Marina One will also have a retail podium called The Heart, which will also serve as a sanctuary and green space.

The development will also incorporate a unique garden ecosystem by landscape architect Gustafson Porter, best known for their world-class design of Singapore’s Bay East, Gardens by the Bay.

PM Lee said he is happy to see the bricks and mortar starting to come up on site.

He added: “It’s going to be an iconic project in the middle of our new business district for many, many more years to come. This is a project that both countries will be proud of and which will thrive and prosper in our city and friendship.”

Mr Najib said he is excited to see the design for himself.

“I think it’s a wonderful design. I think we have a real winner in this Marina One and it will certainly fulfil our expectations… A landmark, an iconic building and what we see today is the beginning of that iconic building,” he added.

The two leaders were also briefed on the progress of the other joint project located near Kampong Glam.

The project, called DUO, includes office, residential and hotel components.

It sits on 160,000 square metres of gross floor area and is valued at S$4 billion.

The DUO and Marina One are part of six land parcels jointly developed by Singapore and Malaysia under a land swop deal agreed on in 2010.

Source : Channel NewsAsia – 19 Feb 2013