Office Market Review

Q3 2021

Demand

Healthy leasing activity in Prime Financial District

Despite Covid-19 restrictions and concerns over the economy, many multinationals are taking a medium/longer term view for future growth and continue to plan ahead. This has buoyed up the office market, at a time when most might have expected a contraction in demand. Whilst demand has indeed weakened in all sectors, there has been reasonable activity, also boosted by those displaced tenants from AXA Tower and Fuji Xerox Towers needing to find new space.

The prime financial district has seen healthy activity. Optiver, one of the 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 secured prime office space in one of CapitaLand’s flagship schemes, CapitaGreen. Elsewhere in Raffles Place, Thunes/DTOne, a business payments specialist, has recently relocated from Anson House to lease a whole floor in One Raffles Place Tower 2.

Whilst demand has indeed weakened in all sectors, there has been reasonable activity, also boosted by those displaced tenants from AXA Tower and Fuji Xerox Towers needing to find new space.

One Raffles Quay North Tower has been particularly busy. The schemes' joint owners, Keppel Land, Hongkong Land and CK Asset Holdings have wasted no time in filling up the massive amount of space freed up when their anchor tenant UBS Bank, relocated to their own building at 9 Penang Road. Recent tenants to commit to this scheme include L’Oreal Singapore, which has leased some 67,000 sq ft. They are currently located in 30,000 sq ft in One George Street (one whole floor), so this move is quite a significant expansion. The floor they are giving up in One George Street is already under consideration by one of OGS’s existing tenants, which is looking to expand within the building.

Other new tenants for One Raffles Quay North Tower include capital investment firm Omers Capital Markets, which has leased some 19,300 sq ft and will be relocating from One Raffles Quay South Tower. 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 are moving back to North Tower again.

Finally, fund management company Capital International, is expanding within the building, almost doubling in size to lease some 58,000 sq ft. Nearby, CGS – CIMB Securities (a joint venture with China Galaxy Securities) has leased 1.5 floors, totalling around 38,000 sq ft, at nearby Marina Bay Financial Centre Tower 2.

Elsewhere in the financial district, many of the tenants in AXA Tower are now finding their new ‘homes’ and surprisingly many are taking the opportunity to upgrade to higher quality space. For instance, software company, Red Hat, which currently occupies around 28,000 sq ft in AXA Tower, will be moving later this year, to the premier scheme of CapitaSpring. Shipbrokers, Howe Robinson, have leased a whole floor at Robinson 77 and Bunker Holdings Group is planning to move (with several of its subsidiaries) across the road to the prestigious development of Guoco Tower.

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 in South 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.