Committed Occupancy At CapitaSpring Only 38%
SINGAPORE – The 51-storey CapitaSpring mixed-use project in the city-state’s central business district (CBD) only has a committed occupancy of less than half even though construction is about 75 percent complete, according to a Singapore Exchange (SGX) filing released by joint owners CapitaLand Integrated Commercial Trust (CICT) and Mitsubishi Estate Co. on Tuesday evening (19 January, SGT).
“To date, about 38 percent of CapitaSpring’s 647,000 sq ft of net lettable area (NLA) have been committed. Including leases in advanced negotiations, the development is on track to achieve more than 60 percent commitments by completion,” they said in the filing.
Committed tenants primarily consists of law firms and financial institutions, including anchor tenant JPMorgan Chase & Co.
However, 3 property experts revealed that the 38 percent committed occupancy is low. Before the COVID-19 pandemic, when an office building in the CBD is 75 percent completed, the figure is typically more than 50 percent, reported The Business Times on Wednesday morning (20 January).
Nonetheless, the number of leases secured in CapitaSpring is respectable, said Savills’ Head of property research and consultancy, Alan Cheong. If the health crisis didn’t occur, brand new Grade A office buildings in the CBD that’s about to be completed in 6 months typically have a committed occupancy of 50 percent.
“With many companies today still unsure of their office footprint moving forward, they are procrastinating on decision making,” he explained.
In their SGX filing, the owners revealed that the 280m-tall landmark building in Raffles Place is poised to receive its Temporary Occupation Permit (TOP) by the 2nd half of the year. It’s also the only premium Grade A office project in the CBD completing in 2021.
“As COVID-19 changes the norms of work, the forward-looking features of CapitaSpring have strengthened the development’s value proposition as a flexible, sustainable and connected workplace ecosystem,” said Tan Yew Chin, Chief Executive of CICT’s sponsor, CapitaLand Singapore.
“Supported by CapitaSpring’s prime CBD location, we are confident that the development will enjoy take up rates similar to or better than CapitaLand’s 79 Robinson Road project in the Tanjong Pagar CBD micro-market, which is on track to reach 90 percent committed occupancy,” he added.
In fact, the commercial building will offer a full range of hot desks, private offices, meeting facilities, bare shell leases, and large enterprise suites to better support the flexible office needs of traditional office tenants, as well as expanding small- and medium-sized enterprises looking to take up flexible office space.
Moreover, 10 percent or roughly 68,700 sq ft of CapitaSpring’s office NLA is intended for coworking spaces. These are spread across 3 levels, one each at the low-rise (level 21), mid-rise (level 39) and high-rise (level 40) parts of the building, so that occupants can easily access them. Notably, the 39th and 40th floors are linked by a stairway, connecting CapitaSpring’s mid-rise and high-rise sections.
CapitaLand’s coworking partner, The Work Project (TWP), has also agreed to lease the 21st floor to run a flexible workspace and its facilities. The company also signed a management agreement to oversee levels 39 and 40.
“This marks the first management agreement model for a coworking operator in a Singapore Grade A office building. The arrangement allows for the coworking spaces to be operated as an integrated amenity of CapitaSpring, instead of a standalone lease option,” added the owners in the filing.
