The Singapore government could release up to three office sites for sale as early as the first half of 2010, as office rents are beginning to stabilise, says David Lawrence, CEO of Wheelock Properties (Singapore), based on his experience with the Wheelock Place office tower.
“Look at the Marina area. They have so many sites with the infrastructure ready to go,” he said in a recent news interview, adding the sites could be part of the confirmed list and situated in the Marina area.
A prospective tenant had discussed with the property group to lease a 4,000-square-feet office unit at Wheelock Place. However, Wheelock signed a deal with another party when the former failed to meet the offer deadline. Mr. Lawrence disclosed that he agreed with the deal at a rental rate priced at $1 psf more than was discussed with the first party. For confidentiality reasons, he refused to provide further information.
He said that the slight recovery in rents could be linked to the efforts of Singapore to raise its profile again, the way the government has come through the global financial turmoil, its pragmatism and integrity and good corporate governance. These traits have made it more attractive for firms, especially in fund management, commodities and wealth management in the US and Europe, to operate in Singapore.
He also observed that a similar trend is happening in Hong Kong.
Based on figures released by CB Richard Ellis, Mr. Lawrence is confident that the government could launch office sites quite soon, notwithstanding the considerable supply in the pipeline that has been slated for completion from the fourth quarter of 2009 to 2012.
“I don’t know this for a fact, but I think it is part of government policy or should be part of government policy to keep releasing sufficient land so that office rents are kept reasonable in Singapore, because there are a lot of spin-offs into the economy from having these companies and people in Singapore,” Mr. Lawrence said.
“Some people will say: ‘But that space won’t be (completed) for four years.’ Actually, as soon as people know there is the expectation of a lot more supply in the future, it tends to have a pretty immediate effect on office rents in fact, because landlords become defensive to keep tenants. It has an immediate effect on the psychology of the market and landlords.”