Thursday, November 10, 2011

Asia Square at Marina Bay has no plans to lower office rents

Straits Times: Wed, Nov 09
THE office market may be slowing but Asia Square has no plans to lower its rents, said its head of office leasing, Mr Luke Moffat.

The newest addition to the prime office segment at Marina Bay will 'take a while' to completely fill up, but is expected to be fully leased out by the middle of next year, he said.

Asia Square is a twin-tower development with 2 million sq ft of Grade A office space. Tower 1's 1.26 million sq ft is 68 per cent leased, with anchor tenants Citigroup taking nine floors, while tech giant Google has three and a half and private bank Julius Baer two floors.

A financial services firm is negotiating to take up 'half of the available space', Mr Moffat said, while commodity and resource firms are in talks to lease some of the remaining space. Rents range from $12 to $16 per sq ft per month.

'We get about four to five new firms every week to take a look at the building,' Mr Moffat said on the sidelines of yesterday's opening ceremony held at The Cube, its 100,000 sq ft, fully sheltered landscaped plaza. 'So even with the slowdown, we are still getting new companies coming in to take a look all the time. I think we will be full by the middle of next year.'

Gloom has settled over the office market, with analysts turning negative and pulling back their rental estimates by as much as 25 per cent for the next year.

Citigroup analysts said just 65 per cent of the 2.8 million sq ft of office space due for completion this year has attracted tenants, and they expect rents to come under pressure in the coming months.

But Mr Moffat struck a more bullish tone for Asia Square, which was developed by real estate private equity firm MGPA.

'We see that there is less competition coming up in the medium term,' he said.

'There have been reports saying there is a lot of supply coming up, but most of that supply is coming up in 2015 and beyond and there is a lot of time between now and then. A lot of (our) competitors... are now getting fully leased, so we don't see it as a period where we have to drop rents but it might be a bit slower, that's all.'

Emeritus Senior Minister Goh Chok Tong, who officiated at the opening ceremony, said the close partnership between the Government and private sector was critical to the successful development of Singapore's new downtown.

'The blueprint for Marina Bay was conceived by the Urban Redevelopment Authority, with many agencies providing the infrastructure and facilitating its growth.

'The private sector developers, builders and designers have breathed life to these plans with their capital, energy and ideas. It reflects their confidence in the political stability, growth and continued good governance of Singapore.'

Source: The Straits Times © Singapore Press Holdings Ltd

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