Demand in the market has been patchy for the last six months, whilst most companies are still assessing what the 'new norm' will look like post Covid-19. For some companies, working from home has been a huge success, but not so for other companies. Most are biding their time, put expansion plans on hold and have extended for the short-term. It is likely many companies will work out a hybrid solution with staff alternating between working from a conventional office and working from home or co-working space.
The market has been boosted by some ‘artificial demand’ from companies that are being displaced due to the redevelopment of their building. Two such buildings are Fuji Xerox Towers (353,500 sq ft) and AXA Tower (680,000 sq ft). The former is more advanced by several months and many of the tenants are close to finalizing their new location. All tenants in Fuji Xerox Towers have just been served notice and will need to relocate by June 2021. Prudential Assurance will be relocating to UE Bizhub West on Alexandra Road, securing some 60,000 sq ft, and Fuji Xerox will be relocating to a similar location at Mapletree Business City, also off Alexandra Road. GAC Singapore has found new offices leasing a floor in Springleaf Tower, and International Data Group are at the final stages of their selection process.
As far as AXA Tower is concerned, it is believed that Lazada are in the final stages of securing three whole floors in 5One Central (fka Manulife Centre and Plaza By The Park) amounting to nearly 100,000 sq ft. The timing of the redevelopment of AXA Tower has still not been determined and most tenants want to stay as long as they can. It will mean that eventually, nearly 700,000 sq ft in total will have to be absorbed elsewhere by those current tenants.
Most recently it has been announced the Malaysian bank, CIMB has leased over 50,000 sq ft on several podium floors at 30 Raffles Place (formerly known as Chevron House). Boston Consulting Group has also leased the top two floors of the brand new scheme 79 Robinson Road, amounting to 46,700 sq ft, at a rental rate in the low double digits. Both firms will be relocating from Singapore Land Tower, which may in turn enable a major refurbishment of that building. Another new tenant to 79 Robinson Road is German bank LBBW Singapore, whose offices are currently located in the German Centre at International Business Park, Jurong. Amazon has taken up 90,000 sq ft in Asia Square Tower 1 (space given up by Citibank).
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