Singapore’s developers are building
more office space in the city’s suburbs as companies including
Credit Suisse Group AG (CSGN) shift some operations away from downtown
to cut costs, according to Cushman & Wakefield Inc.
The city’s supply of suburban office space is expected to
rise to 920,000 square feet in 2014, five times the 190,000
square feet that’s expected to be completed this year, the
world’s largest privately held property services company said.
“There are a lot of these companies that are now bracing
themselves for higher costs, pending a rise in rentals over the
next few years,” Donald Han, Cushman & Wakefield’s Singapore-
based vice chairman, said in an interview yesterday. “They have
to find cheaper options to average down their costs.”
Rents in the central business district are 2.3 times those
in the outskirts, according to government data. Leasing costs
are rising on the island-state similar to the size of the city
of Chicago as companies expand, making Singapore the world’s
ninth-most expensive office market, Colliers International said.
About 44 percent of office space will be in the suburbs by
2014, up from 6 percent now, Han said. CapitaLand Ltd. (CAPL),
Southeast Asia’s developer, said its biggest investment
commitment this year is a S$1.5 billion ($1.2 billion) office
and retail building in a western Singapore suburb.
‘Sub-Hub’
An outskirt project close to subway lines could become a
“sub-hub,” Chong Lit Cheong, chief executive officer of
CapitaLand’s commercial developments, said in an interview
yesterday, prompting the Singapore developer to also “look out
of the central business district.”
Credit Suisse said in a March 17 statement it plans to move
its Singapore operations from five different sites to a downtown
building and a location in a northeastern suburb that will be
completed in the fourth quarter of 2012.
Switzerland’s second-biggest bank will take five floors in
the new building called One@Changi City, with each level
occupying 315,000 square feet, it said in the statement. Rents
at the new building cost about S$4 per square feet, almost a
third of those at its existing downtown location, Han said. Jane
Clapcott, a Singapore-based Credit Suisse spokeswoman, declined
to comment on rents, citing its lease agreement.
Deutsche Bank AG (DBK), Germany’s largest bank, will also move
part of its operations to Mapletree Business City in the
southwestern part of the city by January 2012, where it will
take 120,000 square feet of space, said Terence Ng, a Singapore-
based spokesman, who also declined to comment on rents.
SAP AG, largest maker of business-management software, took
135,000 square feet in January at Mapletree Business City, which
is owned by Mapletree Investments Pte., a unit of Singapore’s
Temasek Holdings Pte.
“We also took into account the many conveniences,” Colin Sampson, chief financial officer for SAP Asia, said in an e-
mailed reply to queries, citing on-site eateries, medical and
child-care services, as well as proximity to a new subway line.
To contact the reporter on this story:
Chien Mi Wong in Singapore at
cwong303@bloomberg.net
To contact the editor responsible for this story:
Lars Klemming at
lklemming@bloomberg.net