Major Moves In Singapore’s Office Market

SINGAPORE – Office rental specialists Corporate Locations revealed there are “two narratives” being played out by tech firms in the local office sector: some continue to lease substantial office space, while others are relinquishing them, reported The Edge on Friday afternoon (9 December, SGT).

For instance, Amazon has agreed to take up 11 floors collectively measuring 370,000 sq ft at IOI Central Boulevard Towers once it starts operating by the 3rd quarter of next year.

Corporate Locations’ Director Douglas Dunkerley shared that the e-commerce giant already leases 45,000 sq ft in One George Street, 80,000 sq ft in Capital Square, and 100,000 sq ft in Asia Square. Hence, Amazon may consolidate its office footprint at IOI Central Boulevard Towers when it starts occupying the space there.

In addition, Facebook’s parent firm Meta will also take up a significant amount of workspace in IOI Central Boulevard Towers.

ByteDance is also leasing an additional 80,000 sq ft of office space in Capital Tower, occupying the workspace surrendered by JP Morgan. Notably, the Chinese tech giant already has a substantial presence in Singapore in Guoco Tower and One Raffles Quay.

On the other hand, Sea Ltd is giving up 200,000 sq ft of Grade A office space at Rochester Commons. At present, the tech firm is searching for a replacement tenant for that workspace, after it fired 7,000 staff in the last six months.

Likewise, people with knowledge of the matter disclosed that Netflix has relinquished 2 office floors at Marina One West Tower. The 30,000 sq ft workspace is being subleased.

“Given the amount of space that tech firms occupy, they have a significant impact on supply within the office sector,” noted Dunkerley.

Still, Singapore office rents are expected to be resilient and it could increase further due to tight supply. However, tenants should be aware of the higher service charges and the impending hike in the Goods and Service Tax (GST).

“Not only are base rents expected to stay firm, but service charges will also increase,” added Dunkerley. In particular, Corporate Locations shared that the monthly rents at premium Grade A office properties have increased to the S$14 to S$15 psf range.

The most impacted office tenants are those who have not witnessed an adjustment in service charges over a long period. Furthermore, office occupants should take into account the impending GST hike to 8 percent from 1 January 2023, and 9 percent effective the following year.