Companies

WeWork to lease entire 21-storey HSBC building in Collyer Quay after bank moves out

The tower, 21 Collyer Quay, will be WeWork's biggest property in Singapore and has a net lettable area of about 200,000 square feet.

SINGAPORE (REUTERS) - CapitaLand Commercial Trust (CCT) will lease out 21 Collyer Quay, a 21-storey building in Singapore's financial district currently occupied by HSBC, to US co-working giant WeWork.

The move marks WeWork's expansion in Asia. The tower will be WeWork's biggest property in Singapore and has a net lettable area of about 200,000 square feet.

The lease with WeWork will start in the second quarter of 2021, for a period of seven years, said CCT, without disclosing financial details of the new deal. Its lease deal with Hong Kong and Shanghai Banking Corp Ltd, a unit of HSBC Holdings, will end in April 2020.

CCT said that the agreement with WeWork is not expected to have a material impact on its net asset value per unit or distribution per unit for the financial year ending Dec 31, 2019.

Its manager also said it plans to capitalise on the transitional occupancy downtime during changeover of tenants to upgrade the building. It said the expected return on investment is approximately 9 per cent on an estimated cost of $45 million to upgrade the property. The building is valued at $462.2 million as at June 30, 2019.

Co-working spaces have become popular among start-ups because these give them the flexibility of short-term leases in well-decorated spaces and keep overheads low. Increasingly, larger companies are also using co-working firms to manage their offices.

In Singapore, the flexible workspace footprint has more than tripled since 2015 and now accounts for some 4 per cent of the office space in the central business district, according to real estate consultancy Colliers.


WeWork's new lease will give it rare signage rights in the country's financial district, said Christine Li, head of Singapore and South-east Asia research at property services firm Cushman and Wakefield.

"It's a very good catch for WeWork," said Li, because typically only a few floors are available in the business district due to low vacancy.

The lease will start in the second quarter of 2020 for seven years, CCT said. WeWork will occupy 20 floors of the building, the US firm said in a separate statement, but did not provide details about the one other floor.

HSBC Singapore said last year that it would relocate its head office to Marina Bay Financial Centre, within the central business district.

Rents for grade A buildings in Singapore's central business district surged 12.7 per cent last year, Cushman and Wakefield's Li said.

She expects rents to stay mostly flat this year at the current level of about $10.61 per square foot per month, due to a slowing economy and uncertainties from trade tensions between United States and China.

Founded less than a decade ago, WeWork has locations in over 28 countries, including in Singapore, China, India.

The money-losing firm, which has filed paperwork for an IPO, has faced questions about the sustainability of its business model that is based on short-term revenue agreements and long-term loan liabilities.

Source: Straits Times, 17 July 2019

Retail podium, three office floors at 30 Raffles Place on the market

A S$110 million revamp of the former Chevron House (centre) will result in a 40 per cent increase in its net lettable area.

A four-level retail podium and the three lowest office floors designated for a banking hall in a revamp of the former Chevron House have been put up for sale through an expression of interest exercise.

The 32-storey property at 30 Raffles Place is being spruced up at a cost of about S$110 million, The Business Times understands.

Among other changes, part of basement 2 is being converted from carpark space to retail. The remainder of basement 2 along with basement 3 will continue to house car park lots.

Word on the street is that the indicative combined pricing for the retail podium and banking hall space is S$480 million.

The price split is roughly S$300 million for the retail space (about S$5,800 psf on net lettable area or NLA); and S$180 million (almost S$3,100 psf) for the proposed banking hall in the office podium, which occupies levels 3, 4 and 5.

Bidders may make offers for either the retail space or the office space, or both.

Located next to Raffles Place MRT Station, 30 Raffles Place is on a site with 99-year leasehold tenure starting December 1989. This leaves a balance term of about 69.5 years.

Divestment of the retail space and the banking hall space is one of the conditions for the final completion of Oxley Holdings' sale of the 32-storey building to a unit of US-based property fund manager AEW for a total of up to S$1.025 billion under a sale and purchase agreement inked in late-April this year.

Oxley has said that it intends to divest the retail space and the banking units (on levels 3 to 5) as soon as practicable, factoring market conditions, and in any event, before the final completion of the proposed sale to AEW, which is expected to take place by the end of first-quarter 2020.

Oxley is also aiming to complete the ongoing major refurbishment of the building, which began on March 1 this year, no later than Q1 2020.

The first completion under the sale and purchase agreement with AEW took place on June 7, resulting in 82.35 per cent of the issued and paid-up capital of Oxley Beryl, which holds 30 Raffles Place, being transferred to buyer AEW's vehicle Golden Compass (BVI).

BT understands that the expression of interest, being conducted quietly by property consulting groups Cushman & Wakefield and JLL, is slated to close towards the end of this month.

The retail podium - on levels 1, 2, basement 1 and part of basement 2 - comprises 79 units. The retail podium's NLA is about 51,400 sq ft and its strata area, 61,500 sq ft.

Tenants have been secured for some of the units, including a health/fitness operator for basement 2. Upon completion of the refurbishment, the retail podium will be rebranded as Change Alley Mall.

An investor stands to derive not only rental payment from tenants but income from additional sources such as event space and a media screen.

As for the office podium (levels 3 to 5), its NLA and and strata area are the same: nearly 58,300 sq ft.

Above the office podium is the office tower (with 27 levels). A lease is close to being stitched, with coworking operator WeWork to take nine floors in the tower, BT understands.

Following the refurbishment, the building's total NLA will expand by about 40 per cent from 261,300 sq ft to 363,000 sq ft.

Source: Business Times, 12 July 2019


CapitaLand, CDL complete S$400m Liang Court mall purchase

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CAPITALAND and City Developments Ltd (CDL) completed their S$400 million acquisition of Liang Court mall on Friday.

The two property groups confirmed the completion of the purchase by their equal joint venture, in a statement to BT.

"The new owners' immediate focus is the daily operations of the mall.

"As part of their active asset management strategy, the joint-venture partners will continually explore ways to enhance the value of the asset," they added.

This confirms an earlier BT story in March that a put-and-call option agreement had been entered into between the mall's owner at the time, an entity linked to PGIM Real Estate, and CapitaLand and CDL.

Market watchers said that with the completion of the transaction, control of the overall Liang Court mixed-development complex has been reduced from three parties previously to two, and that this should facilitate its redevelopment.

Besides the mall, the other two components of the Liang Court complex are: Somerset Liang Court Singapore serviced residence, which is owned by CapitaLand's listed unit Ascott Residence Trust; and the Novotel Singapore Clarke Quay hotel, owned by CDL's indirect subsidiary CDL Hospitality Trusts (CDLHT).

Completed more than three decades ago, the Liang Court complex is located beside the Clarke Quay riverside area and is next to the Fort Canning Station on the Downtown Line.

It is also a short distance from the Clarke Quay Station on the North-East Line.

The site has a leasehold tenure of about 97 years from April 1980, leaving 58 years on its lease.

Under the Urban Redevelopment Authority's Draft Master Plan 2019, the site is zoned for commercial and residential use.

The Liang Court complex was developed in the early 1980s by tycoon Goh Cheng Liang's Wuthelam Group.

In the deal just completed, the mall has been sold by the PGIM Real Estate Asia Retail Fund, an open-end private investment vehicle managed by PGIM Real Estate, the property investment business of PGIM, Inc, which in turn is the global investment management business of US-based Prudential Financial, Inc.

Source: Business Times, 1 Jun 2019

Keppel saves $55m, thanks to energy efficiency

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Local conglomerate implements key initiatives in line with sustainable practices

The renovations at Keppel Bay Tower offices last year were not just about smartening up the paintwork, but focused on cutting-edge tech innovations to make the corporation's headquarters far more energy efficient and environmentally sustainable.

Smart systems were installed to adjust lighting levels to fit the number of people at work, while photo sensors were installed to dim perimeter lighting when there is sufficient daylight.

A clean-desk policy ensures no equipment is left switched on overnight, while copiers have secure printing features to reduce paper wastage.

The initiatives were outlined in a sustainability report Keppel filed with the Singapore Exchange yesterday.

Keppel Corporation chief executive Loh Chin Hua said: "Channelling our capabilities to shape a more sustainable future, aligned with the United Nations' Sustainable Development Goals, while harnessing the business and investment opportunities that these create, are at the core of the Keppel Group's strategy.

"(It is) how we see ourselves contributing to a better world."

Energy efficiency initiatives implemented across the group last year are estimated to have saved 812,134 gigajoules of energy, or $55 million in cost savings.

Keppel Corporation also reduced the intensity of emissions produced by an average of 24 per cent compared with its 2010 baseline.

Mr Loh added: "We are committed to support efforts by the international community and the Singapore Government to tackle climate change."

This is in line with getting corporations to contribute to the fight against climate change by having sustainable practices.

A study by consulting firm Bain & Co in January showed that 81 per cent of the global firms surveyed felt sustainability is more important to their businesses today than it was five years ago.

Besides corporate offices, Keppel is also equipping its data centres with a system called the Diesel Rotary Uninterruptible Power Supply which delivers greater energy efficiency.

Keppel Offshore & Marine is doing its bit as well, working with Keppel Infrastructure on a solar leasing project that involves additional solar panels installed at its offshore and marine yard in Singapore.

A portion of the renewable energy certificates generated through this initiative is transferred to Keppel Corporation, which allowed the corporate office at Keppel Bay Tower to be fully powered by clean energy from the end of last year.

The report added that there will be more efforts to reduce emissions, especially with the new carbon tax that will affect business costs.

"To mitigate the impact of the tax, the group has continued to improve our energy efficiency and reduce our carbon footprint, particularly for businesses that are energy intensive," the report stated.

The group is also exploring technologies that can enhance workplace safety.

One initiative uses drones to inspect, analyse and provide repair support in high-risk areas - such as certain parts of vessels and rigs and cranes, so workers do not have to operate there.

Mr Loh said: " We will actively explore new opportunities and build future growth engines which harness the group's collective strengths and capabilities, and augment our mission as a provider of solutions for sustainable urbanisation."

Source: Straits Times, 28 May 2019


Singapore firms are global leaders in smart buildings, workspace innovation: Poll

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Singapore companies are well ahead of those in other countries in installing smart building initiatives for their workspaces, and also show more awareness of digitalisation, cloud computing and the Internet of Things (IoT), according to a study by London-headquartered office software firm Condeco.

Such progress might be thanks to the city-state's Smart Nation programme launched in 2017, as Singapore leads a number of indicators for office technology, Condeco said.

Condeco surveyed 750 business leaders in six countries: Singapore, Britain, the United States, Australia, France and Germany.

About two-thirds of the respondents were C-suite executives, including chief technology officers and "workspace managers" (a combination of facilities, real estate, office and front-of-house managers). The remaining one-third were senior executives.

In Singapore, almost three-quarters (72 per cent) of respondents said this year that their offices had smart building measures, such as networked appliances and energy efficiency measures, compared with around half (55 per cent) of respondents globally.

This has also brought a knock-on effect on Singapore firms' use of other technologies in the workspace, for example using apps to book meeting rooms, cloud computing and IoT, Condeco said.

"It's only been two years since Singapore launched its Smart Nation initiative, but it really looks like it is paying dividends," said Mr Peter Otto, chief product officer at Condeco.

Compared with last year's survey, Singapore businesses have seen a 17 per cent increase in the use of mobile apps to book meeting rooms this year.

Singapore respondents were also more likely than the global average to expect cloud computing, IoT and Big Data to be important over the next 12 months.

Cloud computing is likely to be important for 55 per cent of Singapore firms, compared with 46 per cent as a whole. Similarly, 50 per cent of firms in Singapore said IoT will be important, versus 35 per cent globally, and 46 per cent in Singapore said Big Data will be important, versus 33 per cent globally.

Digital transformation is the biggest challenge in the next 12 months for business leaders around the world, with 37 per cent of global respondents saying so.

This is followed by the adoption of new technology, with 35 per cent of respondents finding it a challenge.

Across all countries surveyed, access to talent supply (26 per cent) as well as regulation and compliance (24 per cent) are considered greater organisational challenges than business uncertainty (22 per cent).

Singapore also tops the flexi-time rankings, with 66 per cent of business leaders saying that their companies offered it, whereas US companies are least likely to offer it (49 per cent).

Remote working is prevalent in Australia (45 per cent), but least common in Germany (35 per cent).

Source: Straits Times, 23 May 2019

CapitaLand's revamped Funan secures 98% pre-leasing commitment for twin office blocks

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THE twin office blocks of CapitaLand's revamped Funan integrated development has garnered 98 per cent pre-leasing commitment of its total office net lettable area (NLA) of 214,000 square feet (sq ft).

The CapitaLand Mall Trust-owned (CMT) Funan secured the pre-leasing commitment of about 210,000 sq ft of its NLA when it got its Temporary Occupation Permit in April.

Funan’s office tenants, which comprise public agencies, multinational corporations and startups, are slated to move into the two six-storey blocks progressively from the second-quarter of 2019.

The south office block, which has a total NLA of 95,600 sq ft, has been fully leased to three public agencies: the Attorney-General’s Chambers, Singapore Department of Statistics and the Smart Nation and Digital Government Office.

The north block's office tenants include German sporting goods company adidas' South-east Asia office and co-working space WeWork.

"The revamped Funan caters to the new generation of professionals who prefer to work in a collaborative and inspiring environment, at a convenient location where they can unwind at the end of the day with a whole host of lifestyle amenities under one roof," said Tony Tan, CEO of CapitaLand Mall Trust Management.

"With a high commitment of 98 per cent, Funan’s diversified and quality office tenant base will progressively contribute earnings to CMT from 3Q 2019.”

CapitaLand shares closed up 0.85 per cent, or S$0.03 at S$3.57 on Tuesday, while CapitaLand Mall Trust units also closed up 0.82 per cent, or S$0.02 at S$2.45.

Source: Business Times, 8 May 2019

Office-sharing startup WeWork files for stock market listing

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WEWORK, the fast-growing office-sharing startup, said on Monday it had filed documents for a stock market listing to help fuel further expansion.

The New York-based firm valued at some US$47 billion by private investors and operating in some 600 cities worldwide, said it filed its registration confidentially last December with the Securities & Exchange Commission.

The confidential filing allows the company to begin the listing process before divulging key financial and business information.

"This process will enable WeWork to make the decision to become publicly traded, subject to market and other conditions," WeWork said in a statement.

WeWork has taken the lead in the co-working space and in the process is disrupting the office and real estate market with smartly designed offices, often with free-flowing beer and coffee.

Started in 2010, WeWork has hundreds of thousands of customers from individual entrepreneurs to Fortune 500 companies needing temporary or permanent office space.

The monthly deals can be particularly attractive to independent workers who do not want to make a long-term commitment.

But WeWork also rents to employees of large firms such as IBM where regional offices are less convenient.

In January, Japanese tech giant SoftBank invested some US$2 billion in the company as it rebranded itself as "The We Company".

WeWork offered no details on how much money it would seek to raise, its valuation or the timing of its offering.

But the news comes amid a wave of listings from Silicon Valley "unicorns", or startups worth at least US$1 billion, including Lyft, Pinterest, Slack and Uber.

In 2017, WeWork agreed to buy the Lord & Taylor flagship store on New York's Fifth Avenue in Manhattan in a sign of the disruption of the real estate market.

Separately, it was announced in Singapore on Tuesday that WeWork will open its second WeWork Labs location at 380 Jalan Besar in May.

WeWork has also been recognised as a Startup SG Founder Accredited Mentor Partner (AMP) by government agency Enterprise Singapore.

The Startup SG Founder scheme provides mentorship and startup capital grant to first-time entrepreneurs with innovative business ideas, with ESG providing up to S$30,000 by matching S$3 for every dollar raised.

Industry leaders as appointed AMPs identify qualifying applicants based on the uniqueness of business concept, feasibility of business model, strength of management team, and potential market value.

Source: Business Times, 1 May 2019

UBS Singapore to take up all 8 floors of office space at redeveloped Park Mall building

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Developer SingHaiyi Group and its joint venture (JV) partners - Suntec Reit and Haiyi Holdings - announced on Wednesday (April 17) that UBS Singapore has signed on to take up all the office space at the redeveloped Park Mall building.

The move confirms an earlier report by The Business Times report on April 1 that UBS was mulling over a consolidation of its Singapore office footprint.

Located at 9 Penang Road, the property is now undergoing redevelopment, which is on track to be completed in the fourth quarter this year, SingHaiyi said in an exchange filing.

UBS Singapore will take up 381,000 sq ft of net lettable area, spanning eight levels across two towers, and plans to move to the 10-storey Grade A office building in the second half of 2020.

Besides UBS Singapore, the new building has also garnered "strong interest" from potential retail tenants including food and beverage outlets, and ancillary services, SingHaiyi added.

Haiyi Holdings is a wholly owned entity of the group's major shareholders, SingHaiyi's group managing director Celine Tang, and her husband, Gordon Tang.

SingHaiyi Group and Haiyi Holdings each hold a 35 per cent stake in the JV, while Suntec Reit owns the remaining 30 per cent.

The new building is located near Singapore's prime shopping belt Orchard Road and Dhoby Ghaut MRT station. It also has 15,000 sq ft of retail space, and an extended 99-year leasehold which will expire on Dec 7, 2115.

Said Mrs Tang: "9 Penang Road marks SingHaiyi's first foray into commercial property redevelopment, and a strategic springboard to expand our brand and track record in commercial and retail property development."

Separately, UBS Singapore's country head, August Hatecke, noted that the move will allow UBS Singapore to bring its employees working at One Raffles Quay and Suntec City under one roof to enhance collaboration, as well as offer new capacity for future growth in the Asia-Pacific region.

UBS has close to 4,000 employees in Singapore across its businesses, and the new premises will also be home to UBS University, which will lead training and development programmes for its staff across the region.

In a circular sent out to its employees on Wednesday and seen by BT, UBS noted that Singapore is a "strategic priority" of the group, and that the future-ready workplace with the latest connectivity and health facilities will offer an "ideal environment" to enhance the way its staff work and collaborate.

"As sole tenant, UBS Singapore will have full control of building security, which will feature a single-entry system including facial recognition technology."

It added that the new building's energy-efficient construction will also help the group operate in line with the highest environmental standards.

At 4.21pm, SingHaiyi shares were trading flat at 9.5 cents, while units in Suntec Reit were trading unchanged at $1.90.

Source: Straits Times, 17 April 2019