THE Covid-19 outbreak may have caused some potential tenants to pause their office leasing plans but at least a few deals have been done. These include two floors that will be vacated by Grab at Guoco Tower in Tanjong Pagar .

At the soon-to-be-completed Afro- Asia i-Mark project along Robinson Road, Foodpanda parent Delivery Hero is leasing 50,000 to 60,000 sq ft, according to the grapevine.

The Business Times understands that the space that Delivery Hero will occupy in the new development is much larger than the existing space it leases at GB Building in Cecil Street and within flexible space operator JustCo’s premises in Cross Street. Market watchers expect Delivery Hero to give up its existing premises and consolidate at Afro-Asia i-Mark. In other words, this represents an expansion of space, which analysts say is not surprising given that the online food delivery business has been doing well during the pandemic.

There is also talk that e-commerce giant Amazon is in discussions to lease 90,000-plus sq ft on three levels at Asia Square Tower 1.

This is part of the approximately 300,000 sq ft space currently leased to Citi, which has been looking for a replacement tenant for the three floors since last year, BT understands. Word on the street is that the bank is rationalising space in the CBD, relocating some staff to its out-of-town premises in Changi Business Park, where it leases about 400,000 sq ft.

Amazon’s existing office locations in Singapore include Capital Square and One George Street. It also occupies some space at WeWork’s coworking facility at 8 Cross Street.

Meanwhile Fuji Xerox is said to be in advanced discussions to ink a lease for nearly 60,000 sq ft at Mapletree Business City (MBC). It currently occupies about 100,000 sq ft at Fuji Xerox Towers in Anson Road.

At Guoco Tower, where Grab will be vacating two floors adding up to about 54,000 sq ft as part of its move to its new headquarters in one-north, one floor has been leased to QBE Insurance (Singapore) and the other to Toyota Motor Asia Pacific, BT understands. Toyota Motor Asia Pacific has also leased some additional space on another floor at Guoco Tower, resulting in a total of 62,000 sq ft being leased to the two parties.

Toyota Motor Asia Pacific will be relocating from Twenty Anson and QBE, from One Raffles Quay South Tower.

When contacted, GuocoLand confirmed the lease to QBE but declined to identify the tenant that has leased the other floor. GuocoLand’s general manager (asset management), Valerie Wong, said: “We see that office spaces are still relevant today and in the future even as more companies practise telecommuting and working from home becomes the norm since the onset of Covid-19.

“In a post-pandemic environment, the role of offices will continue to evolve from a space for individuals to conduct their work to a place for creative collaboration to take place.”

QBE Singapore’s spokesperson said the factors that drew QBE to Guoco Tower include its efficient floor plate and design plus its convenient location atop Tanjong Pagar MRT station, the wide selection of F&B options and direct connection to a five-star hotel conference facility. CBRE is understood to be involved in several of the above leasing deals but declined to confirm this.

However, its head of capital markets and joint head of office services, Michael Tay, said: “Despite the uncertainty in business environment and on headcount levels, some occupiers are prepared to make lease commitments in Grade A office buildings at rents that may be about 10 per cent below pre-Covid levels as they do not envisage a sharp correction from current levels in the mid term.”

Source: https://www.businesstimes.com.sg/real-estate/a-stream-of-office-space-leasing-deals-in-pipeline-despite-uncertain-business-climate

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