PrimeViews

MAY 2017

SINGAPORE

Office MarketSINGAPORE

City Hall/Marina Centre & Bugis

Marina Bay, Raffles Place & Shenton Way /

Tanjong Pagar

The Singapore CBD comprises of the following submarkets: Marina Bay, Raffles Place, Shenton Way/Tanjong Pagar, City Hall/Marina Centre, Orchard and Bugis.

Marina Bay is the premium business district with a high concentration of tenants from the banking, insurance and financial services sector. Major banks such as DBS and Standard Chartered are anchor tenants occupying multiple floors in prime Marina Bay buildings.

There are a total of twelve prime office buildings in Singapore, seven of which are located in Marina Bay, two in Raffles Place, and one apiece in Shenton Way/Tanjong Pagar, City Hall/Marina Centre and Bugis.

Singapore Office Market

No. Building Name Completion Date Submarket Net Lettable

Area (SF)

1 Asia Square Tower 1 2011 Marina Bay 1,260,000

2 Asia Square Tower 2 2013 Marina Bay 784,000

3 Marina Bay Financial Centre Tower 1 2010 Marina Bay 620,000

4 Marina Bay Financial Centre Tower 2 2010 Marina Bay 1,000,000

5 Marina Bay Financial Centre Tower 3 2012 Marina Bay 1,300,000

6 One Raffles Quay North Tower 2006 Marina Bay 767,000

7 One Raffles Quay South Tower 2006 Marina Bay 565,000

8 Ocean Financial Centre 2011 Raffles Place 865,000

9 CapitaGreen 2014 Raffles Place 702,000

10 Guoco Tower 2016 Tanjong Pagar 884,000

11 South Beach 2015 City Hall / Marina Centre 515,000

12 DUO Tower 2016 Bugis 568,000

Source: Cushman & Wakefield Research

10

2

4

7

911

12

51

3

6

8

Legal

8%

Tech

6%

Real Estate

3%

Professional Services

3% Media

2%Other

9%Metals &Minerals

4%

Banking, Insurance &Financial Services

65%

7,126 SQF

7,126 SQF

7,126 SQF

7,126 SQF

2011 2

012 2

013 2014

2015

2016

5,018 SQF

6,318 SQF

PRIME STOCK (‘000 sf)

TENANT PROFILE

0%

2%

4%

6%

8%

10%

12%

14%

0

400

800

1,200

1,600

2011 2012 2013 2014 2015 2016

Vac

ancy

Rat

e (%

)

Su

pp

ly &

Ab

sorp

tio

n (

‘00

0 s

f)

Supply Absorption Vacancy

SUPPLY, ABSORPTION & VACANCY RATE

Source: Cushman & Wakefield Research

Prime Office Market at a Glance (Marina Bay Only)SINGAPORE

9.05SGD/sf/mo

10.61SGD/sf/mo

13.21SGD/sf/mo12.50

SGD/sf/mo 11.80SGD/sf/mo

10.50SGD/sf/mo

$6

$8

$10

$12

$14

$16

2011 2012 2013 2014 2015 2016

Re

nt

(SG

D/s

f/m

o)

GROSS EFFECTIVE RENTS

Source: Cushman & Wakefield Research

“Singapore Grade A CBD office rents are expected to bottom out in 2017” The office leasing market appears to be stabilizing. While the

flight-to-quality trend bodes well for the new projects, rents for older

buildings may come under pressure as landlords source for tenants to

backfill space vacated by companies which are relocating to Marina

One and Guoco Tower.

June Chua Executive Director – Head of Leasing

Cushman & Wakefield Singapore

Key ThemesSINGAPOREFlight to Quality2016 saw a wave of flight to quality as tenants seized the opportunity to lock in long leases in the new premium developments at attractive rental rates. Despite relocating to buildings with more efficient floor plates, some firms are still expanding and taking up additional space.

Structural Shift in Office Leasing MarketThere has been a structural shift in the office leasing market due to reduced demand from banks, the largest occupier of prime CBD space. However, other sectors with healthy growth potential such as tech, insurance, professional services and co-working are gaining momentum and are likely to drive leasing demand in 2017.

Supply Pressures to AlleviateWhile 2017 will see a supply influx of 2.3 million sf from the completions of Marina One and UIC Building, the inflow of supply will ease significantly post-2017 with less than 1 million sf completing annually. The next large wave of supply totaling 2 million sf will only be seen in 2021, comprised of the Central Boulevard GLS site and the redevelopment of Golden Shoe.

Capital Values Remain ResilientOffice capital values have remained resilient despite declining rents, supported by institutional and individual investors with a long-term horizon. Investor demand for assets in Singapore is expected to remain healthy given the stable political landscape and safe haven status of the Singapore market.

Property SF Tenant Submarket Transaction Date

1 Marina One 250,000 Facebook Marina Bay 1Q2017

2 Marina One 90,000 Prudential Marina Bay 4Q2016

3 Marina One 70,000 BP Marina Bay 4Q2016

4 Guoco Tower 70,000 ING Bank Tanjong Pagar 4Q2016

5 Guoco Tower 55,000 Uber Tanjong Pagar 4Q2016

6 Marina One 180,000 PWC Marina Bay 3Q2016

7 Marina One 100,000 Julius Baer Marina Bay 3Q2016

8 Guoco Tower 100,000 Dentsu Aegis Network Tanjong Pagar 3Q2016

9 Asia Square Tower 2 80,000 Mitsui Marina Bay 3Q2016

10 Marina One 140,000 Bank of Tokyo-Mitsubishi UFJ Marina Bay 2Q2016

Property SF Seller Buyer Submarket Price (SGD Mn)

Unit Price (SGD/SF)

Transaction Date

1One George Street(50% stake)

446,000 CapitaLand Commercial Trust FWD Group Raffles Place 592 2,650 2Q2017

2 PWC Building 356,000 DBS Bank Manulife Raffles Place 747 2,100 1Q2017

3Capital Square(50% stake) 386,000 Alpha Investment

PartnersARA Asset

Management Raffles Place 463 2,400 3Q2016

4Asia Square Tower 1 1,300,000 BlackRock

Qatar Investment Authority

Marina Bay 3,380 2,600 2Q2016

5CapitaGreen (60% stake) 702,000 CapitaLand &

Mitsubishi Estate Asia

CapitaLand Commercial

TrustRaffles Place 960 2,276 2Q2016

6Straits Trading Building 162,000 Sun Venture MYP

(Dr. Tahir) Raffles Place 560 3,520 2Q2016

Significant New Lease Transactions in Last 4 Quarters (Prime Office Buildings)

Major Sale Transactions in Last 4 Quarters(Grade A Office Buildings)

Market SnapshotSINGAPOREQatar Investment Authority’s acquisition of Asia Square Tower 1 set a record as the largest single-tower office transaction in Asia Pacific

Upcoming Prime SupplySINGAPOREMarina One Prime landmark in Marina Bay• Will be completed by mid-2017, owned by M+S which is a joint venture between Khazanah

Nasional Berhad and Temasek Holdings, the sovereign wealth funds of Malaysia and Singapore respectively

• Strategically located in the heart of Marina Bay

• Approximately 1,880,000 sf of premium quality office space over 30 floors and two office towers

• Two high-density floors straddle the East and West towers to provide 100,000 sf of space each, which is one of the largest floor plates in Asia

• Unique design with an inner biodiversity garden known as the Green Heart which will be the largest public plaza in the CBD

• Panoramic views of the CBD skyline and Marina Bay coastline

• The integrated development also includes a 140,000 sf retail component with gourmet restaurants and 1,042 luxury residential units

Transportation Links

Woodlands Checkpoint30 min by Car

Changi Airport40min by MRT

20 min by MRT

Singapore Cruise Centre

Disclaimer:

Cushman & Wakefield (C&W) is known the world-over as an industry knowledge leader. Through the delivery of timely, accurate, high-quality research reports on the leading trends, markets around the world and business issues of the day, we aim to assist our clients in making property decisions that meet their objectives and enhance their competitive position. In addition to producing regular reports such as global rankings and local quarterly updates available on a regular basis, C&W also provides customized studies to meet specific information needs of owners, occupiers and investors.

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. 2017 marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients’ ideas and putting them into action. To learn more, visit www.cushwakecentennial.com, www.cushmanwakefield.com or follow @CushWake on Twitter.

This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material. The information on which this report is based has been obtained from sources we believe to be reliable, but we have not independently verified such information and we do not guarantee that the information is accurate or complete. Published by Corporate Communications.

©2017 Cushman & Wakefield, Inc. All rights reserved.

Cushman & Wakefield, Singapore3 Church Street#09-03 Samsung HubSingapore 049483www.cushmanwakefield.com

Steve SaulManaging DirectorSingaporeT +(65) 6232 0878steve.saul@cushwake.com

Sigrid Zialcita Managing Director Research & Investment Strategy Asia Pacific T +(65) 6232 0875 sigrid.zialcita@cushwake.com

Chris Browne Managing Director Global Occupier Services Asia Pacific T +(65) 6232 0828 chris.browne@cushwake.com

For more information, please contact:

OCCUPIER & INVESTOR SERVICES

RESEARCH SERVICES

GLOBAL OCCUPIER SERVICES

June Chua Executive Director, LeasingSingaporeT +(65) 6232 0838june.chua@cushwake.com

Shaun PohExecutive Director, Capital MarketsSingaporeT +(65) 6232 0882shaun.poh@cushwake.com

Christine Li Director, Research Singapore Tel: +(65) 6232 0815 christineli.mw@cushwake.com