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Fri, Oct 16, 2020 – 3:06 PM
BIG Tech companies are acquiring office space in Singapore, taking advantage of reduced rents amid the recession brought on by the Covid-19 pandemic. These include a group of Chinese tech giants who see Singapore as a base to expand into Asean.
Bloomberg reported Friday that Tencent Holdings chose a co-working space for its first Singapore office.
Citing unidentified sources, Bloomberg said Tencent is expected to occupy 10,000 square feet (square feet), which translates to roughly 200 seats in JustCo’s co-working space at OCBC Center East on Raffles Place.
Meanwhile, TikTok owner ByteDance has agreed to lease three floors measuring over 60,000 square feet at One Raffles Quay, in line with its plans to hire hundreds of employees in Singapore over the next several years.
Amazon is also expected to take over part of Citigroup’s office space in Singapore. Bloomberg reported that Amazon will lease three floors covering approximately 90,000 square feet in Asia Square Tower 1.
Cushman & Wakefield projects that adoption by technology companies will increase to between 400,000 square feet and 500,000 square feet in 2021.
So far this year, grade A office rents in the central business district (CBD) have fallen 3.4 percent, with further compression expected in the fourth quarter, Colliers International said. CBD Grade A gross effective rents moderated again in the third quarter, by 2.3 percent qoq, to S $ 9.77 per square foot per month (psf pm).
Landlords here have been pressured to continue offering higher incentives. Lease-free periods for CBD Grade A offices have increased from 1.3 months to 1.5 months, Colliers said.
He added that some 142,000 square feet of coworking spaces are scheduled to open in the next three months. WeWork will open an 82,000-square-foot branch at 30 Raffles Place, while JustCo will open a 60,000-square-foot branch at The Centrepoint.
The Great Room will occupy some 37,000 square feet in the new Afro-Asia i-Mark building previously 70% committed after completion in Q4 2020, while the Executive Center plans to move to the top two floors at One Raffles Quay North Tower next year, Colliers said.
The relatively stronger take-up of real estate by Big Tech in Singapore reflects a global trend of tech giants acquiring more real estate in major cities.
In New York, Apple, Amazon and Facebook have taken over more than 1.6 million square feet of office space since the beginning of the year, The New York Times (NYT) reported. Most of this was rented or purchased during the pandemic, the NYT said.
The move comes even as many American tech companies have said most staff will continue to work from home and return to the office only from the middle of next year.
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