Amazon said to be in advanced negotiations to lease space at IOI Central Boulevard Towers

Citi Commercial Pte Ltd

A seasoned leasing agent said: “For instance, they could come out of the relatively older buildings such as One George Street and possibly Capital Square but stay put in Asia Square, a newer building that Amazon moved into last year amid much fanfare.” He also noted that Asia Square Tower 1 will be connected via a second-storey covered bridge to IOI Properties’ project.

Assuming Amazon leases both office floors of 70,000 sq ft each in IOI Central Boulevard Towers’ podium and all 9 office levels (of 25,400 sq ft each) in the East Tower, it would end up occupying about 369,000 sq ft.

This would still leave room for at least another anchor tenant, given that the project’s West Tower will have 40 office floors totalling some 887,000 sq ft.

AMAZON is said to be in advanced talks to lease offices in IOI Properties Group’s office development along Central Boulevard. Market estimates of the amount of space that the multinational tech company is looking to lease at IOI Central Boulevard Towers vary, but most sources put it at around 350,000 sq ft.

Amazon is understood to be currently leasing about 45,000 sq ft at One George Street, 80,000 sq ft at Capital Square and 100,000 sq ft at Asia Square Tower 1. It also occupies space in the WeWork facility in Manulife Tower on Cross Street.

If Amazon does ink a lease at IOI Properties’ project - expected to receive its Temporary Occupation Permit in the third quarter of next year - some market watchers suggest that the group may partially consolidate some of its existing locations.

Located next to Downtown MRT Station, IOI Properties’ project will have about 1.26 million sq ft net lettable area of offices and 30,000 sq ft of retail space.

The Bursa Malaysia-listed company is developing the project through its Singapore-incorporated subsidiary Wealthy Link, which clinched the Central Boulevard site at a state tender in late 2016 for S$2.57 billion or S$1,689 per square foot per plot ratio.

Some industry watchers note that, given the importance Singapore has placed on attracting tech companies, Amazon is on the expansion path in the Republic. So too are Facebook parent Meta and Chinese Internet tech company ByteDance, both of which have also been looking at IOI Properties’ project.

S$12-14 psf average rent target

Some sources say that Meta is also in advanced discussions for space at IOI Central Boulevard Towers. It is an anchor tenant at the nearby Marina One, where it is currently leasing about 500,000 sq ft. It also occupies about 100,000 sq ft at South Beach Tower.

ByteDance is said to be leasing about 130,000 sq ft at One Raffles Quay’s (ORQ) South Tower, which will also have a second-storey covered link bridge to IOI Properties’ project. The company also occupies some space within flexible space operator The Executive Centre’s facility in ORQ’s North Tower and has leased about 100,000 sq ft at Guoco Tower above Tanjong Pagar MRT station. ByteDance is said to be negotiating to lease over 100,000 sq ft at Capital Tower; the space was formerly occupied by JP Morgan, which has relocated to CapitaSpring in Market Street.

“CBD Grade A Singapore office rents will continue to rise on the back of tight supply; for big tenants seeking space, it is in their interest to lock in a lease early.”

June Chua of Colliers

Talk in the market is that while IOI Properties may be targeting to achieve monthly gross effective rents of about S$12-14 per square foot on average for its project, the first or second big-name anchor tenants may enjoy preferential rents. “As has been the strategy for a lot of landlords of new office developments, clinching such ‘statement tenants’ will help serve as a catalyst for leasing activity in the project, giving an opportunity for IOI to ramp up rents for subsequent leases,” said the leasing agent.

While some occupiers - including tech companies and asset management outfits - are growing their business and headcount in Singapore, this may not necessarily translate to an increase in their office space requirement depending on the particular hybrid work model adopted by an organisation, say analysts.

Another office leasing veteran, Colliers’ head of tenant representation for Singapore June Chua, said: “CBD Grade A Singapore office rents will continue to rise on the back of tight supply; for big tenants seeking space, it is in their interest to lock in a lease early.”

“Large tech companies continue to be the key demand driver, while the likes of family offices and fund managers have also helped to support demand for Grade A offices.”

Colliers is forecasting that Singapore CBD Grade A office rentals will go up a further 4.5 per cent in 2022 after inching up 0.8 per cent in 2021. The property consulting group expects the CBD Grade A office vacancy rate to shrink to 3.2 per cent as at end-2022 from 4 per cent as at end-2021.

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