GuocoLand has obtained a temporary occupancy permit for the office component of the S$2.4 billion ($1.83 billion) Guoco Midtown project, allowing tenants to begin occupying the 30-story tower in Singapore’s Downtown Core. The doors are open, the Singapore-listed developer announced on Tuesday.
This milestone allows GuocoLand, the Singapore property development arm of Malaysia’s Hong Leong Group, to begin formal leasing of space for a 709,000 sq ft (65,868 sq m) Grade A office project on Beach Road. Officials of the company said that the project above the Bugis MRT station.
“The phased completion of Guoco Midtown will expand our portfolio of investment properties and increase our recurring income,” said Cheng Hsing Yao, CEO of GuocoLand, in a statement. “Just like how Guoco Tower transformed and elevated Tanjong Pagar, Guoco Midtown will soon do the same for the Beach Road-Bugis area. It strengthens GuocoLand’s track record.”
According to GuocoLand, tight supply in Singapore’s office market continues to drive the project, including contracts in the advanced stages of negotiations, so the office project will be approved under the city’s Green Mark Code for Sustainable Buildings. It has been awarded the Platinum Award and is already 80% pre-committed. Rents in Southeast Asia’s financial hub.
Part of the 3.2-hectare (7.9-acre) Guoco Midtown integrated development, the office building houses German chemical company BASF, Chinese internet company NetEase Interactive Entertainment, Liechtenstein-based private financial firm VP Bank, among others. A company will move in.
The project has also attracted local tenants, including shipping company Pacific International Lines (PIL). The company’s chief executive, Lars Kastrup, said in a statement that as his company modernizes its operations, its sustainability and flexible office capabilities attracted him to the project.
“PIL aims to be a future-focused organization and we want our workspace to support the development of a collaborative and innovative workforce. Guoco Midtown’s office space is perfect for achieving our goals,” said Kastrup. “Located in integrated green developments like Guoco Midtown, with conveniences and products such as Network He Hub, we will drive connectivity and sustainability as a dynamic shipping company. can do.”
PIL is being relocated to Tower after being sold Headquarters at 140 Cecil Street A joint venture between local private equity firms TE Capital Partners and LaSalle Investment Management in a S$324 million deal closed in February last year.
GuocoLand said other tenants committed to the building come from banking and finance, professional services, consumer and technology sectors, as well as specialty sectors such as shipping, energy and chemicals.
Retail, condominium elements in progress
Co-developed by GuocoLand and its parent company Guoco Group, the Midtown Complex also includes the Midtown Bay Condominium Tower, which offers 219 high-end units on 33 floors, and three retail hubs that together offer 50,000 square feet of total space. Built in. shops and restaurants.
Midtown Bay, along with retail facilities at Midtown Square and Midtown Market, will be completed this year as part of a phased rollout of Midtown House, a preserved building formerly known as the Beach Road Police Station.
Also scheduled for completion in 2023 is the five-story Network Hub Flexible Office element of the complex, which will offer up to 80,000 square feet of desk space, meeting rooms and meeting facilities on a short or on-demand basis.
The second part of the complex, located across the road on Tang Kyu Lan Street, will include the Midtown Common retail cluster and the 558-unit Midtown Modern Condominium Tower and is expected to be completed in early 2024.
This part of the project is being developed by GuocoLand with Hong Leong Group and its Hong Realty unit on a 124,107 square foot lot. 2019 Government Land Sale.
Rent growth slows
New supply from Guoco Midtown is pouring into a market where tight supply has led to steady increases in Grade A office rents.
Urban Redevelopment Agency Statistics Median rents in Singapore’s Downtown Core and Orchard project areas reached S$11.16 per square foot per month in Q4, up 2.5% from an average of S$10.89 per square foot in Q3. , 6.9% above that level. Installed 1 year ago. The increase for this period from October to December was his seventh consecutive quarter as growth in office rents in Singapore.
Singapore’s Core District Grade A office vacancy rate was 9.5% in Q4, down from 12.4% at the end of September 2021.
In addition to the softening business environment, IOI Properties’ Central Boulevard Towers, located in Guoco Midtown and Marina Bay, said Chan Wong Lam, head of research and consulting at real estate consultancy Edmund Thai, said the Supply from projects is likely to keep office rent growth in check this year, he said.
“Rent growth is expected to moderate as businesses consolidate and right-size space needs rather than outright expansions,” Lam said in a note last week, adding that he expects moderate rent growth in Singapore’s key districts. We expect premium and Grade A office rents to rise by 2-4%. This year they are 1 percent and 3 percent respectively.