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Big Tech is here, and it's snapping up real estate in Singapore
BIG Tech firms are snapping up office space in Singapore, taking advantage of crimped rents amid the recession set off by the Covid-19 pandemic. These include a gaggle of Chinese tech giants seeing Singapore as a base to expand into Asean.
Bloomberg reported on Friday that Tencent Holdings has chosen a co-working space for its first office in Singapore.
Citing unnamed sources, Bloomberg said Tencent is expected to take up 10,000 square feet (sq ft), translating to about 200 seats at JustCo's co-working space in OCBC Centre East at Raffles Place.
Meanwhile, TikTok owner ByteDance has reportedly agreed to lease three floors measuring over 60,000 sq ft at One Raffles Quay, in line with its plans to hire hundreds of staff in Singapore over the next few years.
Amazon is also expected to take over some of Citigroup's office space in Singapore. Bloomberg reported that Amazon will lease three floors covering about 90,000 sq ft at Asia Square Tower 1.
Cushman & Wakefield is projecting the take-up by tech firms to increase to between 400,000 sq ft and 500,000 sq ft in 2021.
Year to date, central business district (CBD) Grade A office rents have fallen 3.4 per cent, with further compression expected in Q4, said Colliers International. CBD Grade A gross effective rents moderated again in Q3, by 2.3 per cent quarter on quarter, to S$9.77 per square foot per month (psf pm).
Landlords here have been pressed to continue offering higher incentives. Rent-free periods for CBD Grade A offices have increased from 1.3 months to 1.5 months, Colliers said.
It added that some 142,000 sq ft of co-working spaces are set to open in the next three months. WeWork will open an 82,000 sq ft branch at 30 Raffles Place, while JustCo will open a 60,000 sq ft branch at The Centrepoint.
The Great Room will occupy some 37,000 sq ft at the new 70 per cent pre-committed Afro-Asia i-Mark building after its completion in Q4 2020, while The Executive Centre plans to move into the two highest floors in One Raffles Quay North Tower next year, Colliers said.
The relatively stronger take-up of real estate by Big Tech in Singapore reflects a global trend of tech giants taking up more real estate in major cities.
Over in New York, Apple, Amazon and Facebook have snagged more than 1.6 million sq ft of office space since the start of the year, reported The New York Times (NYT). Most of this was leased or bought during the pandemic, NYT said.
The move comes is even as many US tech firms have said that most staff will continue to work from home and return to the office only from the middle of next year.