REFLECTING resilient demand for secondary office space vacated in older but choice office buildings, all of the 143,000 square feet under Citi's lease at Millenia Tower expiring next month has found new takers.
Citi began to vacate the space earlier this year, completing its exit from the building in July. This marked the final leg of the group's four-phase departure from Millenia Tower and the next-door Centennial Tower that began in 2011.
Prior to that, Citi had occupied a total of about 440,000 sq ft in the two buildings, which are part of the Millenia Singapore development owned by Pontiac Land Group.
In 2011, Citibank began its move to Asia Square Tower 1.
Among those who have leased the 143,000 sq ft at Millenia Tower that Citi is giving up are four tenants who have each leased a floor of 17,000 sq ft - PayPal, Barry Callebaut, Bank of New York Mellon and Dymon Asia Capital.
PayPal has been operating from its new premises on Millenia Tower's 14th floor since the second quarter of this year.
This represents an expansion of business for the group, which continues to have a presence in Suntec City.
In September, Dymon Asia Capital, a Singapore-headquartered investment management company, moved into the fourth level of Millenia Tower from Suntec City.
Barry Callebaut Cocoa Asia Pacific Pte Ltd is another new tenant.
It is expected to move in later this month to the 12th floor, where it will set up its regional headquarters, which is being relocated from Malaysia.
The Zurich-based group is the world's leading manufacturer of high-quality chocolate and cocoa products.
Bank of New York Mellon, which now occupies three floors (Levels 2, 3 and 4) of Millenia Tower, will occupy the seventh floor as well from next month.
The rest of the space Citi vacated in the building this year has been leased to tenants involved in the financial and commodities businesses as well as a designer eyewear tenant from Italy believed to be Luxottica, whose brands include Ray-Ban and Oakley.
Pontiac Land said tenants that have inked leases for the 143,000 sq ft ex-Citi space in Millenia Tower have agreed to pay monthly rents ranging from the high-$8s to $10-plus per square foot.
Last year, BT reported that Pontiac Land took just nine months to fill back all the 129,000 sq ft in the next door Centennial Tower vacated by Citi in November 2011.
Pontiac leased the space to existing tenants such as Sumitomo Mitsui Banking Corporation and McKinsey while clinching a few new names as well.
All eyes now are on the 55,000 sq ft that Allianz vacated earlier this month on Centennial Tower's Levels 3, 7, 8 and 9 though its lease runs until July 2015.
Agents are busy finding replacement tenants who can sign up fresh leases with Pontiac Land even before the July 2015 expiry of Allianz' lease.
The German financial services provider has moved to Asia Square Tower 2.
Pontiac Land is asking for $13 psf a month, for smaller units below 3,000 sq ft at Centennial Tower, although lower psf rents can be negotiated for bigger spaces.
According to Pontiac Land spokeswoman, tenants have been drawn to the two office towers by several factors, including ample carpark space with a total 1,500 parking lots for the Millenia Singapore development, which includes the two office towers, two hotels and Millenia Walk mall.
In addition, Millenia Tower boasts a concierge facility provided by Conrad Centennial Hotel.
"Our tenants also enjoy the prestige of being located in a mixed development with museum-quality art pieces," added the spokeswoman.
CBRE executive director (office services) Moray Armstrong reckons that after stagnating at $9.55 psf for the first three quarters of this year, the firm's average monthly rental value for Grade A office space will end the year 2 per cent higher than the $9.58 psf at end-2012.
CBRE's Grade A basket covers the best-quality buildings in Raffles Place, Marina Bay and Marina Centre.
For next year, he predicts a 5 to 7 per cent increase supported by continuation of the "reasonably strong demand for office space" seen this year.
Source: Business Times, 14 Nov 2013