THE Ministry of Health (MOH) is the party that is in discussions to lease office space at SP Group’s Labrador Tower, and not MOH Holdings as reported in The Business Times Weekend. (*See amendment note)

A spokesperson for MOH said on Thursday (Jul 20): “MOH is planning to consolidate and move its existing HarbourFront area offices. One of the locations being considered is Labrador Tower.”

BT Weekend had earlier reported that MOH Holdings – the holding company of Singapore’s public healthcare clusters – was expected to lease about 140,000 sq ft of office space at Labrador Tower, which will be completed next year. MOH Holdings clarified on Saturday that it was not in talks to lease the space.

Elaborating on Thursday, MOH Holdings said its current office occupies parts of two levels at HarbourFront Centre; these will be relocated to the upcoming Elementum project when the lease expires. Elementum is being developed by Ho Bee Land in the one-north area.

BT also understands that insurer Prudential Singapore, which had earlier leased about 150,000 sq ft of office space at Labrador Tower, is likely to exercise an option to rent a further 50,000 sq ft in the project.

Market watchers estimate that Prudential might be paying a higher monthly gross effective rental, in the low-S$8 per square foot (psf) region, for the second tranche of space. It paid in the mid-S$7 psf region for the initial tranche.

Also heading to Labrador Tower is Anglo-Eastern Ship Management, which has taken a floor. It is currently at Southpoint in Cantonment Road.

Most of Labrador Tower’s office floors are 24,000-plus sq ft to 26,000-plus sq ft. Located in Pasir Panjang Road, the project will have about 700,000 sq ft lettable office space on 29 floors of a 34-storey tower.

Retail and F&B businesses will occupy Levels 1 and 2 of a low-rise block; there will also be some F&B space on the top level of the office tower.

The office tower will have panoramic views of the sea and greenery. The certified Green Mark Platinum Super-Low Energy project will be directly linked to Labrador Park MRT station next door. Labrador Tower is being built above a large underground electrical substation.

Analysts keeping an eye on HarbourFront Centre

Market watchers are keeping an eye on just how much office space at HarbourFront Centre – owned by Mapletree Investments – will be released to the market, given that MOH Holdings is a major tenant in the building.

Besides MOH Holdings, its fully-owned health-tech subsidiary Integrated Health Information Systems (IHiS), and another related entity have also rented space at Elementum. The 12-storey development near Buona Vista MRT station is slated for completion in Q4 this year.

IHiS is set to leave Mapletree Industrial Trust’s property at 6 Serangoon North Avenue 5, where it occupies some 140,000 sq ft. Its lease in the building expires in Q1 2024.

At Elementum, IHiS has leased 200,000-plus sq ft of business park space. In all, the trio in the MOH Holdings stable that will be at Elementum will occupy about 90 per cent of the 312,000 sq ft of business park space in the project. Market observers have estimated the trio would be paying a monthly rental of S$6-plus psf; this would be a preferential rate negotiated as anchor tenants.

Elementum will also have 50,000 sq ft of offices and 10,000 sq ft of retail space. The project is part of the Biopolis precinct of the one-north district.

In a recent report on its second-half 2023 Singapore property market outlook, property consulting group Cushman & Wakefield noted that with tight supply and ongoing active expansion by life-science firms, the vacancy rates of business parks in Biopolis, a life-science precinct, remained tight at 4.2 per cent (as of Q2 2023). It could tighten further.

*Amendment note: An earlier version of this story had stated that MOH Holdings was expected to lease about 140,000 sq ft of office space at Labrador Tower. This was incorrect. It is the Ministry of Health that is in discussions to lease office space at Labrador Tower. The story has been amended to reflect this. We are sorry for the error.