The increasing trend in office rental deals continues, helping to take in more of the space in new office projects being developed.
Most of the leasing buzz has focused on 50 Collyer Quay and Ocean Financial Centre (OFC), which will be completed in 2011, and 71 Robinson Road, which was finished in 2009.
Law firm Drew & Napier is believed to have made a deal to lease a 93,000-sq-ft space in OFC. ANZ is said to be finalizing a rent of about 200,000 sq ft in the same establishment.
While most of the new rental deals in the market involve owners moving from older buildings to new office towers, many of them are taking more space in their new location than what they will be giving up to accommodate incoming increase in headcount amidst an improving economic outlook in Singapore.
Asking rents in Grade A office buildings, especially in new properties, have also started to improve according to some property agents.
At OFC, which is slated for completion in two phases in H1 of 2011, Drew & Napier will occupy five levels in the 43-storey office tower’s low-rise zone. The company will be moving out of Ocean Towers. Both of the properties were owned by Keppel Land.
ANZ is expected to occupy 13 floors in OFC’s mid-rise zone. This is almost a quarter of the 850,000 sq ft net lettable area (NLA) of the building. It is understood that the space ANZ will be renting will be almost double of what it currently occupies in OUB Centre, which it will vacate.
DMG & Partners Securities, Ifast and Verizon Communications are among the tenancies squeezed earlier at OFC. All of them will vacate Ocean Towers. Once the ANZ deal is finalized, almost two-thirds of OFC would be pre-let.
Slightly over 50 percent of the five-million-odd sq ft of Grade A new office space has been pre-let, providing concerns of a potential shortage of completion between 2013 and 2014, assuming that the current demand continues.
Grade A office rentals are expected to pick up five to 10 percent in 2010, with more significant appreciation predicted for the next two years, according to some agents.