Tag Archives: Office Space

Q3 office occupancy rate soars to 97.6% in Singapore

The strong demand for office space in the central business district has spilled over to the rest of Singapore.

According to property consultants DTZ, the occupancy rate for office space islandwide climbed to 97.6 percent in the third quarter.

This is largely because of an acute shortage of office space in the Central Business District (CBD).

DTZ says the shortage is due to the demolition of Asia Chambers Building and the alteration works being done at two office blocks, OUB Building and Ocean Building.

The office market saw a net loss of 455,000 square feet of stock in the three months to September.

Occupancy rates in Raffles Place rose by 1.1 percent from the previous quarter.

With higher asking rents and lack of office space in the CBD, many companies have flocked to the CBD fringe and decentralised areas.

This has boosted occupancy in these regions with the Alexandra area, for example, rising 3.5 percent to full occupancy.

Average monthly rents for Alexandra have increased by 13 percent to S$6.80 per square foot per month from the second quarter.

Another area, Novena, achieved 98.5 percent occupancy. – CNA/ch

Source : Channel NewsAsia – 28 Sep 2007

Banks get flexible with property needs

The short supply of available office space in the central business district is driving financial institutions to be more flexible when planning their real estate needs.

“Currently, banking and finance tenants occupy 36 per cent of all Grade A stock in Singapore, or close to 500,000 sq m,” said Justin Kean, associate director of Asia Pacific occupier research at consultancy Jones Lang LaSalle (JLL).

“This figure has increased by approximately half since the beginning of 2006.”

Added Mr Kean: “This implies that much of the recent rental movements in this market can be attributed to the banking and finance sector.”

A JLL white paper on real estate trends in the banking and finance sector showed financial institutions are exploring ways to create a better work environment, besides just looking at physical locations for expansion.

Advancements in data storage and communication technology have enabled the separation of front and back-end operations. The latter are then moved to cheaper locations.

To optimise office space, some banks here are considering the possibility of hot-desking, or allowing staff to work off-site or from home.

Such arrangements, together with the adoption of flexible work hours, would give the banks the flexibility to absorb minor shocks in the market, which might result in the reduction of staff numbers, without downsizing their real-estate portfolio.

JLL said, in line with the rise in corporate social responsibility within the sector, more real estate managers are making it an important part of their portfolio management strategy, including selecting eco-friendly buildings.

Source : Weekend Today – 25 Aug 2007

Cheung Kong may sell stake in Marina Bay Financial Centre

Hong Kong billionaire Li Ka-shing’s Cheung Kong Holdings may sell its one third stake in Singapore’s Marina Bay Financial Centre to Suntec Real Estate Investment Trust (Reit) when the complex is completed in 2010.

The stake is likely to be worth “more than US$1 billion ($1.5 billion)”, Mr Justin Chiu, executive director of Cheung Kong said. The company is building the 24-hectare office and residential complex on a waterfront site in Singapore with Hongkong Land Holdings and Keppel Land.

“We haven’t made a decision yet,” Mr Chiu said. “But as a parent, of course you want to take care of your own children. If the price is not that far off from the next interested buyer, we will sell.”

Cheung Kong and its partners made a joint bid of US$1.8 billion in 2005 for the 3.55-hectare site, part of Singapore’s plans to create a new business district.

The new Marina Bay, which will include projects such as a botanical garden, a casino-and-convention centre and luxury apartments, is aimed at luring companies and tourists.

Suntec Reit owns offices and retail space in Singapore, including the Suntec City development. Recently, Cheung Kong said it will sell its one-third stake in One Raffles Quay, another downtown office block built with Hongkong Land and Keppel Land, to Suntec Reit, for US$941.5 million.

“The offer was good, so we sold it,” Mr Chiu said. “Suntec Reit is our long-term commitment to Singapore. We like the place.”

Cheung Kong is bidding for a site at Beach Road near Suntec City, Mr Chiu said. It is working with Keppel Land on the tender. — BLOOMBERG

Source : Today – 3 Aug 2007