Replacement Tenant In Rochester Commons

Sea Ltd Said To Be Looking For Replacement Tenant In Rochester Commons

SINGAPORE – Word on the grapevine is that Shopee’s Parent, Sea Ltd, is looking for a replacement tenant for its 200,000 sq ft office space in the newly-opened Rochester Commons project in one-north, according to a report from The Business Times that was updated on Thursday afternoon (17 November, SGT).

It is said the conglomerate inked a 7-year lease for the majority of the workspace in Rochester Commons, which is touted as the 1st campus-style integrated development in Singapore. Sea Ltd’s office space there is also apparently not yet fitted-out.

Market watchers shared that Sea Ltd is surrendering the office space after excessive spending, furious hiring, and aggressive planning in the past 3 years to increase market share. Its prior decision is now being unravelled by a need to demonstrate a clear path to profitability as its investors turn cautious.

In May 2021, the news outlet reported that Sea Ltd was expected to lease most of the office space in Rochester Commons in tandem with its growth. Notably, the conglomerate is also the parent firm of digital financial services provider SeaMoney and game developer Garena.

Rochester Commons contains around 200,000 sq ft of office space in the upper portion of the project’s 17-storey tower and its usual floor plate measures roughly 22,500 sq ft. It also features 12 black-and-white heritage bungalows. Of these, 5 are for F&B or retail use, while the remaining 7 are for office usage.

Back then, market observers reckoned that Sea Ltd could be paying a gross effective monthly rent in the high S$7 psf range for the office space in Rochester Commons.

Moreover, it is rumoured that the conglomerate is marketing some of the office space at its headquarters at Galaxis and at the Solaris building, both of which are located in one-north.

There is also talk that Sea is marketing some of its office space at its headquarters in Galaxis, as well as at Solaris – buildings that are also in one-north. Galaxis is owned by CapitaLand Ascendas REIT, while Solaris is held by Soilbuild Group. Shopee also leases the entirety of 5 Science Park Drive, which is also owned by CapitaLand Development.

When contacted on Wednesday, a representative from the development’s owner CapitaLand said “Sea Ltd remains contractually obligated to its lease at Rochester Commons.” As for Sea Ltd, its spokesperson said they don’t comment on market gossip.

According to Cushman & Wakefield’s (C&W) Q2 2022 office market update, office rental growth in Singapore is forecasted to ease towards the end of 2022 and into 2023 as companies brace for a possible recession.
“Technology firms, a key office demand driver, have largely become more cautious on the back of a tightening financing landscape,” explained the property consultancy.

Based on C&W’s data, the tech industry made up 23 percent of the office leasing demand in Singapore’s CBD in H1 2022, down from 34 percent for the entirety of 2021. Tech firms came 2nd only to the financial sector, which accounted for 41 percent of CBD office leasing demand during the 1st half of the year compared to 33 percent for the whole of 2021.

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