Singapore office landlords embrace flexibility and tech as they spruce up properties
OWNERS of Grade A office properties in Singapore are injecting more flexibility, tech innovation and refurbishments into their offerings, to vie for tenants seeking higher-quality spaces and agile workplace leasing.
Gone are the days of cubicles and rigid lease structures as the template. Cushman & Wakefield (C&W) noted that available traditional office space will start to decline as landlords incorporate more flexible space into their buildings, either via direct lease or management agreements with co-working operators, or through the landlord's own co-working brand.
Based on C&W's basket of Grade A office properties in the central business district (CBD), the largest landlords include CapitaLand, Suntec Reit, Keppel Reit, and M+S.
Tenants are requesting flexibility due to hybrid working and evolving space requirements. Citi analyst Brandon Lee wrote in a recent report that some want right-to-give-back and right-to-offer clauses, to reduce or increase space in a certain number of years, while others are asking for space within co-working operators' premises in the same buildings.
Suntec Reit: T82U -1.29% and Keppel Reit: K71U -0.83% are among those that have allowed for greater flexibility in lease tenures, rent structures and lease terms for some tenants, their spokespeople separately told The Business Times (BT).
More landlords, including CapitaLand and Keppel Reit, are also offering core-and-flex solutions. CapitaLand: C31 -0.26% has partnered co-working operator The Work Project to provide flexible spaces in Capital Tower, Asia Square Tower 2, CapitaGreen, and the upcoming 51-storey CapitaSpring.
The CapitaSpring integrated development will house hot desks, meeting facilities, private offices, large enterprise suites and bare-shell leases, to support any new, flexible requirements of conventional office tenants and the expansion needs of small and medium enterprises. About 68,700 square feet across three floors - or 10 per cent of its office net lettable area - is set aside for flexible workspaces.
And at CapitaLand Integrated Commercial Trust's (CapLand IntCom T: C38U -0.47%) office tower 21 Collyer Quay, currently closed for enhancement works, US co-working giant WeWork's seven-year lease for the entire 200,000 square feet of net lettable area is expected to start in early Q4 2021 on a gross rent basis.
Bridge+, CapitaLand's wholly-owned co-working and flexible workspace business unit, is also curating a fintech hub at 79 Robinson Road.
The manager of OUE Commercial Reit (OUE C-Reit), which has co-working operators in most of its office properties, described flexible workspaces as complementary to traditional offices. "Having co-working operators as tenants within our portfolio has proven to be a competitive advantage as more tenants seek this flexibility," its spokesperson said.
Where feasible, OUE Com Reit: TS0U 0% has also been relocating some tenants to other properties in its portfolio to support their evolving space requirements, as it gets more proactive in engaging tenants.
These relocation efforts have helped maintain a stable committed occupancy of about 95 per cent at its Singapore office properties since the pandemic started, and were possible as OUE C-Reit "has a foothold" in the key CBD submarkets of Raffles Place, Marina Bay and Shenton Way, the spokesperson added.
Meanwhile, City Developments Limited (CDL) told BT it has been taking a "nimble" approach to office lease renewal discussions, in tune with market conditions. "The emergence of work-from-home and hybrid working models during the pandemic continue to make the demand for office spaces more fluid," CityDev: C09 -0.57% said.
The emphasis on flexibility looks here to stay.
Two upcoming CBD Grade A projects will incorporate the core-and-flex concept, CBRE co-head of office services David McKellar noted. In particular, GuocoLand's Guoco Midtown has developed the concept even further by featuring a purpose-built Network Hub of lounges, agile offices and collaborative workspaces with seminar and training facilities, he added.
Guoco Midtown, CapitaSpring and IOI Properties' Central Boulevard Towers are also set to bring more innovation into the CBD, as these new developments will be equipped with intelligent building systems, biophilic features and large floor plates, Mr McKellar said.
CapitaSpring will be equipped with WiFi 6 technology and ample power points for users to plug-and-work in common areas, and turnstiles will use facial recognition. Also in the plans are the deployment of Internet of Things (IoT) sensors, and fully automated smart-cleaning robots integrated with the access control system.
Likewise, Keppel Reit's Keppel Bay Tower has facial recognition and mobile apps for contactless access, a cooling tower water management system, and integrated sensor technology to optimise fresh air intake.
Apps to engage office workers are increasingly being rolled out and beefed up with additional services. Common features include building access and amenities booking.
CapitaLand's CapitaStar@Work app, launched in July 2020, provides building-related updates, food and beverage deals, employee pulse surveys, contact tracing, and visitor pre-registration. Six of the group's office properties and two Bridge+ co-working spaces in Singapore had been onboarded to the app as at May 2021.
CDL in December launched a contactless lift eCall function at Republic Plaza, enabling occupiers to call for lifts from their smartphones. The feature is integrated with the developer's proprietary app, CityNexus, which also provides services such as hourly tracking of indoor air quality and contactless turnstile access. CDL plans to introduce more value-added services on CityNexus to boost productivity and convenience for office tenants.
Keppel Reit pointed out that technology adoption is essential, given the shift towards hybrid work arrangements. "Landlords will have to provide robust IT infrastructure and incorporate smart building technologies to support tenants' conferencing requirements," it added.
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