CUSHMAN & Wakefield is projecting rents in Singapore’s central business district (CBD) to land at S$9.54 per square foot (psf) per month by the end of 2020, down 10 per cent from 2019’s peak of S$10.66 psf per month, it said in a report on Thursday.

Emerging vacancy in the market placed a downward pressure on Grade A office rents, CBRE said in a separate report on the same day.

In the fourth quarter of 2020, Grade A office rents corrected for its fourth consecutive quarter, declining at 2.8 per cent quarter on quarter to S$10.40 per square foot per month.

This represented a full year decline of 10 per cent in Grade A office rents, which reversed the rental growth of 6.9 per cent in 2019, CBRE’s report noted.

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THE pandemic took its toll on office rents in the third quarter as souring business sentiment and a weaker labour market prompted rentals of office space to decline 4.5 per cent quarter-on-quarter for the Central Region after holding steady in the previous quarter.

Analysts said that more occupiers sought to right-size and cut costs by scaling back on some or all their space as leases came up for renewal, while landlords had to lower rents more aggressively to find replacement tenants.

With working from home still the default, office space is also under-utilised, said Christine Li, head of research, (Singapore and Southeast Asia) for Cushman & Wakefield.

Real estate consultancy JLL estimates that the average monthly gross effective rents for Grade A CBD office space came down by 3.8 per cent quarter-on-quarter to S$10.08 per square foot (sq ft) in Q3, accelerating from a 3 per cent decline in Q2.

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RENTALS of office space in the central region of Singapore fell 4.5 per cent quarter on quarter in the third quarter of 2020 after remaining flat in the previous quarter.

Figures released by the Urban Redevelopment Authority (URA) on Friday also showed that prices of office space in the central region went up 0.2 per cent in Q3 after declining 4.3 per cent in the previous quarter.

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Seventh storey offering has been renovated; price is about S$1,800 psf

AN ENTIRE floor of GB Building in Singapore’s central business district has been launched for sale with a guide price of nearly S$9.8 million.

Located on the seventh storey of the 143 Cecil Street tower, the sale offering has been renovated and features a regular floor plate with a column-free layout.

Its price tag works out to about S$1,800 per square foot (psf) based on the strata area of 5,425 square feet.

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RENTS for business parks in Singapore’s city fringe are projected to rise as more firms seek out business parks with Grade-A office specifications in a bid to cut their real-estate costs.

In the third quarter of 2020, rents of business parks in the city fringe stood at S$5.91 per square foot per month (psf/month), up 0.2 per cent quarter on quarter and 2.4 per cent higher from a year ago, data from real estate services firm Cushman & Wakefield showed.

Christine Li, the company’s head of research for Singapore and South-east Asia, said another factor driving the move to business parks is the trend of companies with a large proportion of their employees working from home, thus lowering the need for central business district (CBD) office space.

She said: “The movement towards business parks with Grade-A specifications and the continued moderation of Grade-A CBD rents will further narrow the rental gap between CBD office and city-fringe business park space over the next few quarters.”

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BIG Tech firms are snapping up office space in Singapore, taking advantage of crimped rents amid the recession set off by the Covid-19 pandemic. These include a gaggle of Chinese tech giants seeing Singapore as a base to expand into Asean.

Bloomberg reported on Friday that Tencent Holdings has chosen a co-working space for its first office in Singapore.

Citing unnamed sources, Bloomberg said Tencent is expected to take up 10,000 square feet (sq ft), translating to about 200 seats at JustCo’s co-working space in OCBC Centre East at Raffles Place.

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[SINGAPORE] Tencent Holdings has chosen a co-working space for its first office in Singapore, joining other Chinese tech giants in using the city-state for a launching pad into the rest of Asia.

The WeChat owner will have almost 200 seats at JustCo’s co-working space in OCBC Centre East at Raffles Place, according to people familiar with the plans, who asked not to be named because the matter is private. The space amounts to 10,000 square feet, or 929 square metres.

The lease runs for one year, giving China’s largest social media and video-gaming company flexibility to seek a larger space as it adds staff, the people said. Tencent said in September that it would open an office in Singapore.

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A PORTFOLIO of 27 strata office units occupying four levels of 20 Cecil Street in the heart of Singapore’s central business district has been offered for sale.

The indicative price for the entire portfolio is S$100 million, which translates to an average price of S$3,143 per square foot based on a total strata area of about 31,979 square feet (sq ft). The strata area of each unit ranges from 786 sq ft to 2,303 sq ft. The 27 Grade A units can be purchased individually or in bulk, said joint marketing agents PropNex Singapore and Savills Singapore.

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SIX shophouses – three on Baghdad Street, and three in the Telok Ayer area – were put up for sale on Wednesday.

With the sites for all six shophouses zoned for commercial use, purchases are open to both local and foreign buyers, with no additional buyer’s stamp duty to be imposed.

Three adjoining prime shophouses at 14, 16 and 18 Baghdad Street are up for sale as an entirety by expression of interest (EOI) at an indicative price of S$7.64 million. This works out to about S$3,000 per square ft (sq ft), sole marketing agent CBRE said in a statement.

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THE current global recession will have a more benign and shorter-lived impact on offices in the Asia-Pacific (APAC) – excluding Greater China – than elsewhere around the world, while the region’s office sector will take just a marginal hit from the work-from-home phenomenon.

That’s according to real estate services firm Cushman & Wakefield (C&W), which noted that all APAC economies are set to see gross domestic product (GDP) return to pre-Covid levels by Q3 2021 in the baseline scenario.

The slowdown in the creation of new office-using jobs as well as the outright job losses will challenge office leasing fundamentals over the next six to 18 months, C&W noted in a report published on Thursday.

That said, demand – as measured by net absorption – in the region is forecast to remain positive from now through 2030.

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PIL Building fails to get URA nod to tap CBD Incentive Scheme because of its site area

ATTEMPTS to sell two office towers – ABI Plaza in Tanjong Pagar and PIL Building in Cecil Street – have hit a snag.

In the case of ABI Plaza, a private fund managed by CapitaLand that was doing exclusive due diligence with a view to buying the 12-storey freehold block did not enter into a deal when the exclusivity period ended last Friday .

BT understands that the fund had sought an extension of the due diligence period but the building’s owner – listed MYP, which is controlled by the family of Indonesian tycoon Tahir – is not keen.

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TENCENT Holdings is the latest in a string of Chinese tech companies that have set up shop in Singapore.

But the Internet giant is not likely to be the last, with Charmian Aw, a Reed Smith lawyer who specialises in technology, calling the Republic “a highly attractive infocomm and digital technology hub for the region”.

As a confluence of factors brings more Chinese tech players into Singapore, the local job and property markets could get an uplift, analysts told The Business Times.

As such, the latest expansions were no surprise to watchers, who have noticed an uptrend in the Chinese presence in recent years.

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