IBM Unit To Lease 2.5 Office Floors At CapitaSpring
SINGAPORE – CapitaSpring’s office component has obtained its Temporary Occupation Permit (TOP) last week, with roughly 90 percent of its net lettable office space of 635,000 sq ft either committed or under advanced negotiation, reported The Business Times on Tuesday afternoon (24 August, SGT).
Based on market chatter, IBM’s subsidiary Red Hat is anticipated to take up almost 2.5 office floors collectively measuring nearly 60,000 sq ft in the mixed-use development.
Notably, software provider Red Hat is relocating from AXA Tower, which is poised to undergo redevelopment. At present, Red Hat leases 33,000 sq ft of office space there. CapitaSpring is located close to Raffles Place MRT Station, while AXA Tower is opposite Tanjong Pagar MRT Station.
Market observers point out that tech firms are among the few sectors that are still increasing their office space in Singapore.
“In Singapore, we observe that tech companies and investment houses are also exhibiting expectations for higher growth in office leasing demand,” noted Lim Lay See, Co-head of office services here at CBRE.
On the other hand, banks and other financial companies are trimming their office footprints here. Nonetheless, new developments like CapitaSpring is a chance for some of them to upgrade to a better-located office tower with larger floor plates and better specifications.
For example, Sumitomo Mitsui Banking Corporation (SMBC) is said to have rented about 68,600 sq ft at the new building. The Japanese bank is relocating from Centennial Tower in the Marina Centre area, where it is currently leasing around 150,000 sq ft. Under its “hub-and-spoke” strategy, SMBC is anticipated to take up around 45,000 sq ft in Changi Business Park as well.
Given CapitaSpring’s bigger floor plates measuring from 22,000 sq ft to 23,000 sq ft as well as those in Changi Business Park, the Japanese bank can increase the efficiency of its space usage.
In comparison, Centennial Tower’s floor plates only span about 18,000 sq ft. Usually, having more space per level allows for greater space efficiency as this reduces the need to duplicate certain premises like lift lobby and pantry areas.
Moreover, The Business Times understands that committed gross effective monthly office rents at CapitaSpring have increased from mid-S$10 psf in H2 2020 to the high-S$12 psf range at present.
The integrated project’s first and biggest tenant is JPMorgan. The multinational bank inked its lease in early-2018 at nearly S$10 psf for 155,000 sq ft of office space from the 24th floor to level 30. JPMorgan is poised to vacate Capital Tower, where it is leasing 150,000 sq ft of workspace.
CapitaSpring’s other tenants include Saxo Markets, Jones Lang LaSalle (JLL), The Work Project (3 levels), and Squarepoint Capital, which has agreed to occupy the highest office floor at Level 49.
BT has learnt that JLL brokered the leases for JPMorgan and Red Hat, while CBRE negotiated the leases for Squarepoint Capital, Saxo Markets, and SMBC.
Situated on the former site of the Golden Shoe Car Park and Market Street Food Centre, the 51-storey CapitaSpring comes with 635,000 sq ft of office space from the 21st floor to level 49. The remaining components are expected to obtain its TOP by the end of this year.