Hongkong Land looks for more office sites in Singapore
Hongkong Land, which owns a stake in the biggest developer of Singapore's new financial centre, will seek more commercial plots in the city state as tenants seek to upgrade to new buildings.
The Singapore-listed firm, in a venture with Cheung Kong and Singapore's Keppel Land, would evaluate land purchases in the city's prime office areas when the government put them on sale, executive director Robert Garman said.
The venture built the key development in the new business district, Marina Bay Financial Centre, for about S$4.5 billion (HK$27.3 billion).
Global banks such as Standard Chartered and Macquarie upgraded their Singapore offices to new locations developed by Hongkong Land and its partners, while Barclays and Nomura have relocated regional and global functions to Singapore.
Monthly prime office rents rose 4.2 per cent in the June quarter from the previous three months, according to property consultancy Cushman & Wakefield.
"We are confident of the Singapore office market," Garman said. "There are still multinational companies that remain in older properties, so one can argue that there is sufficient demand that can be absorbed in this new district."
The city state's move to open up its financial sector after the 1997 Asian financial crisis has helped boost demand for office space, according to CBRE.
The area known as Marina Bay is a 360-hectare development area created from reclaiming land off the sea fronting the banking district. It now includes Las Vegas Sands' Marina Bay Sands casino resort with a convention centre that is able to accommodate 45,000 delegates.
Land reclamation played a prominent role in the growth of Singapore's central business district, according to CBRE.
Rents in Marina Bay posted the strongest start to a recovery, climbing 10.9 per cent in the three months to June from the March quarter, while the vacancy rate declined 2 percentage points to 3.6 per cent, Cushman said.
"We are at a cusp where rents are bottoming out this year, and pricing power will shift back to the landlords next year," said Vikrant Pandey, an analyst at UOB Kay Hian.
"The economy is picking up, which will translate into better office demand."