More Firms Set Up Flagship Offices In Singapore

SINGAPORE – More businesses are establishing their flagship office in standalone projects in the city-state Singapore, according to a report from property consultancy Jones Lang LaSalle (JLL) that was published on Wednesday (27 July, SGT).

While this is not an easy thing to accomplish in land-scarce Singapore, at least seven large office space occupiers have surmounted this challenge and established their flagship offices in boutique developments.

One strategy how they accomplished this is joining forces with real estate developers to custom-build their new headquarters in business parks, which was done by tech firm Grab and gaming company Razer.

Grab teamed up with Ascendas REIT in 2019 to design and construct its new headquarters in one-north, and agreed to lease the office space for 11 years, with an option to renew for another five years.

However, this option is viable only for office tenants who comply with the strict rules for utilizing business park spaces. These include using the space mainly for high-tech activities, as well as research and development (R&D).

Another strategy is pre-committing office space early in the development cycle, as this increases an office tenant’s chance of securing bulk office space.

In November 2021, multinational investment bank UBS officially opened its biggest Asia Pacific office at 9 Penang Road, where it is the sole tenant. UBS committed to lease the entire office space in April 2019 while the project was still under development.

Likewise, Shopee opened its first standalone flagship office at Science Park in September 2019 after it committed for the space in early-2019 when the development was still under construction.

The e-commerce firm’s parent company Sea Ltd adopted a similar strategy in 2021. It pre-committed most of the workspace in the then still-under-construction Rochester Commons prior to its completion in June 2022.

The other strategy is adaptive reuse of non-traditional office premises. For example, Dyson officially opened its new global headquarters at the recently restored St James Power Station. Home-grown online firm ShopBack also recently opened its regional headquarters at 65 Pasir Panjang, which was refurbished from an old school building.

“Notably, these flagship offices are in standalone buildings located outside the CBD. In the CBD, as buildings are built to high density, co-location with other occupiers is more common. Even then, the availability of large contiguous space is limited given the market’s low vacancy rate of 6.8 percent as of Q2 2022. Hence, it is best for occupiers to pre-commit early to developments under construction. This approach was adopted by occupiers such as JP Morgan in CapitaSpring, Equinix in CapitaSky and Delivery Hero in Afro-Asia,” noted JLL.

“Alternatively, as in the case of Alibaba Singapore, the e-commerce giant acquired a 50 percent stake in AXA Tower in 2020 with the intention to redevelop the property to house its new corporate headquarters,” added the property consultancy.