Recently, flagship office premises in standalone developments have sprouted at an unprecedented pace.
In land-scarce Singapore, this is not an easy feat. Yet, since 2019, at least seven large-space occupiers have overcome this challenge and set up their flagship offices in boutique developments
1. Build-to-suit in business parks
Multinational technology company Grab and gaming firm Razer tied up with developers to custom-build their new headquarters in business parks. For example, Grab partnered with Ascendas Reit in 2019 to design and build its new headquarters in one-north, and committed to lease the space for 11 years with an option to renew for five years.
This option is viable only for occupiers who meet the stringent qualifying criteria for using business park spaces. These include using the space predominantly for high-tech, research and development activities.
2. Pre-commit to the space early in the development cycle
In November 2021, global investment bank UBS officially opened its largest Asia Pacific office at 9 Penang Road, where it is the sole occupier. UBS committed to lease the entire space in April 2019 while the development was still under construction.
Similarly, Shopee opened its first standalone flagship office at Science Park in September 2019. Shopee signed up for the space in early 2019 when the building was still under construction.
Shopee’s parent company, Sea Ltd, adopted a similar strategy two years later. It pre-committed most of the office space in the then still-under-construction Rochester Commons for its expanded operations. This is about a year ahead of Rochester Commons’ completion in June 2022.
Early pre-commitment during the development cycle raises large occupiers’ chances of securing the requisite space in bulk.
3. Adaptive reuse of non-traditional office premises
In March 2022, Dyson officially opened its new global headquarters at the recently restored St James Power Station (SJPS) in the Harbourfront area. SJPS was built in 1927 as Singapore’s first coal-fired power station. It was decommissioned in 1975 and converted to a warehouse, followed by a nightlife complex until 2018. Landlord Mapletree restored and changed the use of the space to a modern office before handing it over to Dyson in 2021.
The home-grown online company, ShopBack, also recently opened its regional headquarters, called Campus by ShopBack at 65 Pasir Panjang. Shopback’s new office is refurbished from an old school building managed by the Singapore Land Authority.
Notably, these flagship offices are in standalone buildings located outside the CBD. In the CBD, as buildings are built to high density, co-location with other occupiers is more common. Even then, the availability of large contiguous space is limited given the market’s low vacancy rate of 6.8% as of 2Q22. Hence, it is best for occupiers to pre-commit early to developments under construction. This approach was adopted by occupiers such as JP Morgan in CapitaSpring, Equinix in CapitaSky and Delivery Hero in Afro-Asia.
Alternatively, as in the case of Alibaba Singapore, the e-commerce giant acquired a 50% stake in AXA Tower in 2020 with the intention to redevelop the property to house its new corporate headquarters.
Figure 1: Recent flagship office buildings
Source: JLL Research
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