This takes pre-commitment to over 70%; other recent signings include ABN Amro, Shiseido, Sumitomo
RIDING the current uptick in the office market, Frasers Centrepoint has received pre-commitments for more than 70 per cent of Frasers Tower in Cecil Street.
Tenants that have signed up recently include French energy giant Total, The Business Times understands. Total will be leasing six floors - adding up to around 125,000 sq ft - mostly in the mid-zone of the 38-storey development.
The French group will be relocating from Raffles City and Odeon Towers, where it leases about 80,000 sq ft in the two buildings.
Total is the fourth largest international oil and gas major, with sales of US$149.7 billion in 2016, according to its website.
Frasers Tower is expected to receive its Temporary Occupation Permit in the first half of this year.
Japanese cosmetics group Shiseido has also signed up for about 50,000 sq ft; it is expected to move out of Haw Par Centre in Clemenceau Avenue. Sumitomo Corporation has leased about 43,000 sq ft; it will relocate from Mapletree Anson.
Arup - which is involved in engineering, design, planning and built environment consultancy - is taking up close to 40,000 sq ft.
Microsoft, which signed up earlier, has leased about 125,000 sq ft.
More recent signings include ABN Amro - which will be moving out of One Raffles Quay - Fonterra and Pacific Life .
Frasers Tower will have about 664,000 sq ft net lettable area (NLA) of offices and 23,000 sq ft of retail space.
The development will have 32 office floors, starting from Level 5; all but one of the office floors range from around 19,400 sq ft to 21,800 sq ft.
The 38th floor will have about 10,000 sq ft of office space, which Frasers Centrepoint is expected to occupy.
Above that is a sky garden with a panoramic view of the city. There is also a terrace on the fourth floor of the tower.
Adjacent to the office tower is a three-storey retail podium with food and beverage spaces and a roof garden. The development will feature a 17,200 sq ft park at street level that will include an F&B establishment.
Gross effective office rents in Frasers Tower are understood to have appreciated by 10 to 15 per cent over the past year amid recovering Grade A rents in Singapore's central business district.
Market watchers believe that FCL will be aiming to reach high single-digit and if possible double-digit per square foot (psf) monthly rents for the remaining space, which is largely in the high zone of the building.
CBRE and JLL are the joint marketing agents for Frasers Tower.
Andrew Tangye, regional director of leasing at JLL, declined to comment on the identity of tenants and nature of leasing deals, but said: "FCL has timed the market well to commit tenants before the building is completed, capitalising on the fact that the office market has stabilised in 2017 and prime Grade A rents are now growing and supply tightening.
"This bodes well for Frasers Centrepoint in leasing out the remaining space in the tower."
CBRE executive director of advisory & transactions (office) Michael Tay, said: "We expect that the limited remaining floors at Frasers Tower will be swiftly taken up through this year noting the limited supply pipeline through the next two to three years."
Mr Tay said CBRE arranged a high volume of the pre-lease deals at Frasers Tower to date, but declined to name any specific parties.
"The impressive pre-commitment performance is another clear sign that the office market is fast recovering," he said. "It is really encouraging to see sectors such as energy, consumer products and financial institutions returning to the market."
Mr Tangye of JLL noted that the Tanjong Pagar, Robinson Road and Cecil Street stretch of the old CBD is being rejuvenated - first with the completion of Guoco Tower and soon Frasers Tower and upcoming redevelopments on the former CPF Building site and of the Afro-Asia Building.
AXA Tower is also undergoing a major refurbishment programme.
JLL's average monthly rental value for its CBD Grade A office basket bottomed in Q1 2017 at S$8.44 psf before recovering 9.4 per cent to S$9.23 psf in the fourth quarter.
JLL expects rents to increase over 10 per cent this year on the back of continued healthy demand, steady economic growth and sharply tapering supply in the next couple of years.
Source: Business Times, 12 Jan 2018