Q3 2021 Published 12 July 2021

Singapore Office Market Review

Photo by Saul Flores on Unsplash

Demand Index

Healthy leasing activity in Prime Financial District Rental Table pg 2 Demand pg 3 Despite Covid-19 restrictions and concerns over the economy, many multinationals are taking a medium/longer term view for future growth Supply / Future Developments pg 4 and continue to plan ahead. This has buoyed up the office market, Special Building Reviews pg 5-6 at a time when most might have expected a contraction in demand. Whilst demand has indeed weakened in all sectors, there has been Best Value Options pg 7-8 reasonable activity, also boosted by those displaced tenants from AXA Tower and needing to find new space. Featured Buildings pg 9

Full update on page 3 Trends / Rentals / Forecasts pg 10

Corporate Locations (S) Pte Ltd License No. L3010044A Disclaimer

T +65 6391 5212 The information in this publication should be regarded as a general guide only. Whilst every care is [email protected] taken in it preparation, no representation is made or responsibility accepted for its accuracy or completeness. The rentals mentioned are neither asking rentals nor rentals agreed by property owners, www.corporatelocations.com.sg but only represent the writers views on estimated rentals and is intended as reference only. Office Rental Table Keck Seng Tower $5.50-$6.50 Pools Building Full Manulife Tower $9.00-$10.00 Sunshine Plaza $6.00 Official Asking Rates MYP Plaza $6.50 Tanglin Shopping Centre $6.20 OUE Downtown 1 & 2 $9.00 The Bencoolen $5.50 S$ per sq ft per month – PIL Building $6.50 The Heeren $10.50 inclusive of service charge $8.50-$9.00 Thong Teck Building $7.11-$8.00 Robinson 112 $6.50 Tong Building $9.00 1 July 2021 Robinson Point $8.00-$8.80 TripleOne Somerset $8.50-$8.80 SBF Centre $6.80-$9.00 Visioncrest Commercial $8.00-$9.00 /New Downtown SGX Centre 1 & 2 $7.95-$9.50 $11.50 6 Battery Road $11.50-$13.00 Shenton House $4.80-$5.50 Wilkie Edge $7.50-$9.00 6 Raffles Quay $7.15-$7.50 SIF Building $7.20 Winsland House I & II $9.50 18 Robinson $12.00-$14.00 The Globe $6.50 $9.80-$10.00 20 Collyer Quay $9.00-$12.50 The Octagon $5.80-$6.00 30 Raffles Place $10.00 Tokio Marine Centre $8.00 Chinatown/River Valley Road 55 Market Street $9.00-$9.50 Tong Eng Building $5.20-$7.00 Central Mall Full AIA Tower Full UIC Building Full CES Centre $5.80 Tower 1 $14.00 $5.50-$7.50 Asia Square Tower 2 $12.00-$13.00 Great World City $7.50 ASO Building TBA 78 Tower 1 $6.00-$8.00 Havelock II $7.00 Bank of China Building Full 78 Shenton Way Tower 2 $9.00 King’s Centre $6.50 Bank of Singapore Centre $9.50 79 Anson Road $8.00-$8.30 The Central $6.69-$9.50 Bharat Building $6.50 100AM $7.30 UE Square $8.00-$8.30 CapitaGreen $13.50 ABI Plaza $7.00 Valley Point $6.50 CapitaSpring $14.00 Anson Centre $4.50 Capital Square $10.00 Anson House $8.50 Edge of CBD Clifford Centre $8.00-$9.00 Frasers Tower $12.00 Alfa Centre $6.80 Far East Finance Building $4.80-$6.00 $14.00 Aperia* $6.00+ Grace Global Raffles $8.50 International Plaza $5.00-$6.50 Boon Siew Building $5.10-$5.50 Great Eastern Centre Full Jit Poh Building $5.70 Central Plaza $7.30-$7.50 $9.00 Mapletree Anson POA Goldhill Plaza $4.80 Income@Raffles $9.00 MAS Building $8.30 Newton 200 $9.00 $13.00 Southpoint $6.80-$7.00 Novena Square $8.00-$8.50 Maybank Tower Full $8.20 Rex House Full MBFC Tower 1, 2 & 3 $11.00-$13.00 St Andrew’s Centre $5.30 SLF Building $4.00-$4.20 MYP Centre $10.50 Tanjong Pagar Complex $3.80 United Square $7.50-$7.80 OCBC Centre $9.50 Twenty Anson $10.00 OCBC Centre East $9.00 East OCBC Centre South Full City Hall/Marina Centre/Beach Road AIA Tampines Full $12.00-$13.00 11 Beach Road Full ARC 380 $5.80-$6.50 One Finlayson Green $7.90 25 North Bridge Road $7.80 Asia Green $6.00-$6.50 $11.00 47 Hill Street $8.50 Changi Business Park $4.00+ $12.00 5One Central $10.00-$10.50 CPF Tampines Full Tower 1 $10.00-$11.00 Beach Centre $7.80 ESR BizPark@Chai Chee $3.00+ One Raffles Place Tower 2 $11.00-$11.50 Towers $9.20 Hiap Hoe Building $5.50 Towers $12.00 Centennial Tower $14.00 Income@Tampines Junction $5.50 OUE Bayfront $13.00-$14.00 Duo Tower $12.00-$12.50 NTUC Income Tampines Point $5.50 PLUS $10.00 Funan Full $4.80 Prudential Tower $8.00-$9.00 $14.00 Paya Lebar Quarter $9.00 Republic Plaza 1 $10.00-$11.80 Odeon Towers $7.60-$8.00 Paya Lebar Square $5.42-$5.80 Republic Plaza 2 Full OG Albert Complex $4.80 Singapore Post Centre $6.50 Royal Group Building $9.00 $8.00-$10.00 Starhub Green* $4.60 Royal One Phillip $9.00 Peninsula Plaza $5.50-$5.80 Tampines Concourse $4.20 Hub $9.00-$9.60 Raffles City Tower $10.00-$10.50 Tampines Plaza 1 $5.50 $10.50 $10.50-$12.00 Tampines Plaza 2 $5.50 The Arcade $5.80-$7.00 Stamford Court $7.50 The House of Eden Full Suntec Towers 1- 5 $8.50-$10.00 West/Others UOB Plaza 1 $11.00 The Adelphi $5.90 20 Harbour Drive (formerly PSA Vista) $4.50 UOB Plaza 2 $10.00 $8.00 Alexandra Point $7.50 East & West $7.50 Alexandra Techno Park* $5.00 Robinson Road/Shenton Way ALICE@Mediapolis* $5.20-$6.30 61 Robinson Road $10.50 Orchard Road/Dhoby Ghaut Fragrance Empire Building $5.80-$6.50 71 Robinson Road $10.00-$11.00 50 Scotts Road $8.00 Harbourfront Centre $6.30-$6.90 79 Robinson Road $12.00 51 Cuppage Road $8.00 Harbourfront Tower 1 $7.30-$7.80 80 Robinson Road $8.50 Burlington Square TBA Harbourfront Tower 2 $7.00 108 Robinson Road Full Faber House Full International Business Park Jurong* $4.00+ 110 Robinson Road $6.00 Fortune Centre $6.00 JEM Full 120 Robinson Road $6.00 Forum $7.50 Keppel Bay Tower $8.20 137 Telok Ayer Street $7.50-$8.30 Goldbell Tower $8.00 Mapletree Business City* POA 139 Cecil Street $7.20 Haw Par Centre $7.20 mTower (formerly PSA Building) POA 150 Cecil Street $6.00-$6.50 Haw Par Glass Tower $5.30 Pacific Tech Centre* $3.00+ 158 Cecil Street $8.00 International Building $8.00 Singapore Science Parks $4.50+ Afro Asia i-Mark $9.80 Liat Towers $7.50 The JTC Summit $5.11 Bangkok Bank Building $5.50 $10.00-$11.00 The Metropolis $8.50+ BEA Building $7.50 Orchard Building $7.50 UE Biz Hub West $6.50 Capital Tower $11.00 $9.50 Vision Exchange $5.00-$6.50 Cecil Court $5.50 $4.00 Westgate $6.80-$7.20 City House $8.00-$8.20 $8.00 Cross Street Exchange $8.00-$8.50 Regency House Full * Business Park / B1 space Crown@Robinson $7.50-$9.00 Shaw Centre $8.00 GB Building $5.50-$7.00 Shaw House $8.50 Corporate Locations (S) Pte Ltd All rents quoted are asking rental rates and subject to change without prior notice Licence No. L3010044A In general allow around 10% discount for negotiations for best effective rate www.corporatelocations.com.sg 03 DEMAND

Continued from page 1 They are nearly tripling in size and obviously like this scheme, as they moved from North Tower to South Tower only three years ago. Now they The prime financial district has seen healthy activity. Optiver, one of the are moving back to North Tower again. first global market makers to establish a presence in Asia-Pacific, is planning to open its first office in Singapore later this year, having just Finally, fund management company Capital International, is expanding secured prime office space in one of CapitaLand’s flagship schemes, within the building, almost doubling in size to lease some 58,000 sq ft. CapitaGreen. Elsewhere in Raffles Place, Thunes/DTOne, a business Nearby, CGS – CIMB Securities (a joint venture with China Galaxy payments specialist, has recently relocated from Anson House to Securities) has leased 1½ floors, totalling around 38,000 sq ft, at nearby lease a whole floor inOne Raffles Place Tower 2. Marina Bay Financial Centre Tower 2.

One Raffles Quay North Tower has been particularly busy. The Elsewhere in the financial district, many of the tenants in AXA Tower schemes’ joint owners, Keppel Land, Hongkong Land and CK Asset are now finding their new ‘homes’ and surprisingly many are taking the Holdings have wasted no time in filling up the massive amount of space opportunity to upgrade to higher quality space. For instance, software freed up when their anchor tenant UBS Bank, relocated to their own company, Red Hat, which currently occupies around 28,000 sq ft in building at 9 Penang Road. Recent tenants to commit to this scheme AXA Tower, will be moving later this year, to the premier scheme of include L’Oreal Singapore, which has leased some 67,000 sq ft. They are CapitaSpring. Shipbrokers, Howe Robinson, have leased a whole currently occupying 30,000 sq ft in One George Street (one whole floor), floor atRobinson 77 and Bunker Holdings Group is planning to move so this move is quite a significant expansion. The floor they are giving up (with several of its subsidiaries) across the road to the prestigious in One George Street is already under consideration by one of OGS’s development of Guoco Tower. existing tenants, which is looking to expand within the building. Whilst demand has indeed weakened in all sectors, there has Other new tenants for One Raffles Quay North Tower include capital been reasonable activity, also boosted by those displaced investment firm Omers Capital Markets, which has leased some 19,300 tenants from AXA Tower and Fuji Xerox Towers needing to find sq ft and will be relocating from One Raffles Quay South Tower. new space.

Leasing activity on the fringe of the financial district has been brisk

Italy’s leading bank, Intesa Sanpaolo is expanding and has just moved into a larger offices inSouth Beach Tower on Beach Road, relocating from Suntec Tower 4. Sony Interactive has recently secured new premises in Duo Tower and will be moving from Central Mall later this year, representing quite an upgrade for them.

Finally, iconic law firm Lee & Lee has just secured new office premises at 25 North Bridge Road, formerly known as EFG Bank Building. They are leasing over 15,000 sq ft spread over three floors. They are currently located at Singapore Land Tower, which is scheduled for major refurbishment. The proximity to the law courts from North Bridge Road would obviously have been an influencing factor.

Outside the CBD, Swatch Singapore is moving their regional office and service centre from Keppel Bay Tower, but will remain in the area moving to a commercial building at Harbourside Building. One Raffles Quay

Selection of office movers over the last 6 months

Company Moved / Moving to From

L’Oreal Singapore One Raffles Quay North Tower One George Street DT One / Thunes One Raffles Place Tower 2 Anson House Optiver CapitaGreen New Set-up CGS-CIMB Securities MBFC Tower 2 Singapore Land Tower Capital International One Raffles Quay North Tower One Raffles Quay North Tower Omers Capital Markets One Raffles Quay North Tower One Raffles Quay South Tower Red Hat CapitaGreen AXA Tower Howe Robinson Robinson 77 AXA Tower Bunker Holdings Guoco Tower AXA Tower Intesa Sanpaolo Bank South Beach Tower Suntec Tower 4 Lee & Lee Solicitors 25 North Bridge Road Singapore Land Tower Sony Interactive Duo Tower Central Mall Swatch Singapore Keppel Bay Tower Harbourside Building 25 North Bridge Road 04 SUPPLY Vacancy rates continue to rise across the board

We find that many landlords remain bullish about the office market, despite an increase in vacancy rates because they are well aware that new supply is limited over the next three years and existing stock is diminishing, due to the redevelopment of several large buildings. Still, there are some buildings that have much wider choice of space than others and this is often down to the age of the building/location or asking rates are out of sync with the market.

All locations have a reasonable choice of available space, but rental rates can vary considerably, so it pays to shop around. Best value for money can still be found in Tanjong Pagar, Beach Road and Edge of CBD locations.

All locations have a reasonable choice of available space, but rental rates can vary considerably, so it pays to shop around.

2022 – 2023 Summary of New Office Developments 2022 – 2023

Development Location Estimated Size Completion sq ft

70 Anson Road Tanjong Pagar 150,000 2022 Q1 Rochester Commons Buona Vista 237,000 2022 Q2 Guoco Midtown Beach Road 566,000 2022 Q4 Central Boulevard Towers New Downtown 1,260,000 2023 Q1

Rochester Commons Guoco Midtown Central Boulevard Towers Buona Vista Beach Road Raffles Quay

New supply is limited over the next three years and existing stock is diminishing, due to the redevelopment of several large buildings. 05 FEATURED BUILDING 55 Market Street

Estimated Effective Rate S$8.50 per sq ft / per month

Units from 3,358 sq ft – 21,200 sq ft

Year of Completion 2006 Building Height 16 storeys Average Floor Plate 5,300 sq ft Nearest MRT Raffles Place

Designed by renowned architect Swan & MacLaren, this newly refurbished premium office building offers 16 floors of exclusive units that are column free, in a prime Raffles Place location. Levels 15 and 16 include balcony space and an outdoor terrace.

Features

• Floor plates range from 3,186 to 5,328 sq ft • Occupancy loading – 240 pax per floor • Facial recognition technology • Integrated elevator destination system • Three lifts with side service lift • Curtain glass wall system with low heat transmission • BCA Green Mark Gold Certification

Scan or click here for a 360° panoramic view

Scan or click here for a 360° panoramic view 06 FEATURED BUILDING 30 Raffles Place

Estimated Effective Rate S$9.75 per sq ft / per month

Units from 1,200 sq ft – 18,000 sq ft

Year of Completion 1994 Building Height 33 storeys (No. of office floors 30) Average Floor Plate 9,300 sq ft – 11,500 sq ft Nearest MRT Raffles Place / New Downtown

Newly refurbished 33-storey office building in the heart of Raffles Place. New anchor tenant CIMB Bank

Features

• Occupancy loading 240 pax per floor • Rear service core • High standard fit and finish • Direct underground connection to Raffles Place and New Downtown MRT stations • 30 levels of offices (L3 to L33) / 3 levels of retail (B1 to L2) • Gym and fitness facilities (B2) • End of trip facilities (lockers and shower) • Exclusive bicycle facilities (lift access and 142 lots) • Lift designated control system with direct car park access (71 lots) • Outdoor landscaping and greenery spaces • Air-con ledge for tenants use

Tenant A

COMMON CORRIDOR

LIFT LIFT

FIRE LIFT LIFT LIFT

Tenant B

Scan or click here for a 360° panoramic view 07 Best Value Options Raffles Place / Robinson Road / Shenton Way *Target average effective rate

Raffles Place

UOB Plaza 1 80 Raffles Place

$9.75 psf*

Units: 1,000 – 12,100 sq ft

Photo top left: Aditya Chinchure on Unsplash

Robinson Road / Shenton Way

City House Robinson Road

$7.25 psf*

Units: 1,000 – 7,400 sq ft

Click on building photo for more information 08 Best Value Options Tanjong Pagar / Orchard Road / Edge of CBD *Target average effective rate

Tanjong Pagar

Anson House 72 Anson Road

$7.25 - $7.70 psf*

Units: 1,131 – 12,000 sq ft

Orchard Road

Triple One Somerset 111 Somerset Road

$7.75 psf*

Units: 1,000 – 17,000 sq ft

Edge of CBD

United Square 101 Thomson Road

$6.85+ psf*

Units: 1,000 – 7,200 sq ft 09 Recommended Properties Our Choice *Target average effective rate

Raffles Place / New Downtown

$9.75+ psf*

Units: 1,500 – 14,284 sq ft

Republic Plaza 9 Raffles Place

Shenton Way / Robinson Road

OUE Downtown 2 6 Shenton Way

$8.25 psf*

Units: 775 – 14,853 sq ft

Outside CBD

Keppel Bay Tower 1 Harbourfront Avenue

POA

Units: 1,450 – 13,132 sq ft Trends / Rentals / Forecasts 10

Some landlords offering For some buildings, usually those with particularly high vacancy rates (often because their fitting out incentives anchor tenant has moved) or older buildings, several landlords are being proactive by offering assistance with fitting out the premises, thus reducing the tenant’s capital expenditure exposure. This is usually in the form of offering packages to cover fitting out costs by amortizing / rentalizing the cost over the term of the lease.

The trend towards hybrid office space solutions (mixture between conventional office space and co-working space) continues. This is especially so for tenants who are not sure about their medium-term space requirements. In these cases, many will choose a building which also has a serviced / co-working space operator in it, so if they run out of space they can easily make up the shortfall within such space.

Many tenants are expecting Many tenants are expecting super competitive deals in this market because of the Covid-19 effect super competitive deals in this on the economy, but in general, rates have bottomed out. Many tenants are finding they can renew their leases at the rate they are currently paying and deciding to stay put for a while longer. Those market but… who are downsizing try to do so by carving off surplus space from the current unit, thus saving the hassle / cost of relocating. This has meant there is less movement in the market than before.

Rates remain static despite Top prime rates still average around $11.00 to $12.50 per sq ft average effective. Mid-range patchy demand buildings remain unchanged since Q4 2019, at between $8.50 to $10.00 per sq ft, and the economy range is firming slightly, to between $7.00 and $8.00 per sq ft average effective.

To conclude, our market forecast is for rates to remain static over the next 12 months, although some buildings may see a marginal firming of rates, depending on how many leases fall in / expire and vacancy rates over the next year.

Our market forecast is for rates to remain static over the next 12 months, although some buildings may see a marginal firming of rates

Photo by Lucas Law on Unsplash

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