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JV by Japan's top shipping lines takes 50,000 sq ft at Marina One

13 Jul, 2017

Ocean Network Express, the new joint venture of Japan's "Big Three" shipping lines, is said to be taking up some 50,000 sq ft of office space at Marina One.

The joint-venture company is a consolidation of the container shipping businesses of Kawasaki Kisen Kaisha (K Line), Mitsui OSK Lines (MOL) and Nippon Yusen Kabushiki Kaisha (NYK Line). It includes their worldwide terminal operation businesses, except those in Japan.

The Business Times understands that Ocean Network Express is planning to use the new office spanning 1½ floors as its regional and global headquarters.

Macquarie Bank, which is now at Marina Bay Financial Centre Tower 2, is also said to be in advanced negotiations for some 50,000 sq ft of office space at Marina One.

The two new office towers at Marina One, an integrated development in downtown Marina Bay, are due to be completed soon. Developed by M+S, Marina One's 1.88 million sq ft Grade-A office space is said to be about 70 per cent pre-leased ahead of its completion.

Some consultants believe that the healthy take-up at Marina One has contributed in part to improvements in premium office rents in Marina Bay.

Consultants saw an uptick in gross effective rents in Grade-A CBD office space, led by the Marina Bay submarket, after a two-year rental decline.

As a sign of earlier-than-expected bottoming out, gross effective rents of Grade-A office space in the CBD edged up a modest 0.6 per cent during the second quarter to S$8.49 per square foot per month (psf pm), after declining 19.6 per cent over the last two years. This was led by the Marina Bay submarket, which recorded an uptick of 1.3 per cent to S$9.51 psf pm.

The turnaround in office rents came on the back of the firming of rents in better-quality buildings with higher occupancy rates, as well as the continued inching up of the take-up rates of recently and soon-to-be completed projects above the psychological barrier of 50 per cent, said an analyst.

Additionally, as some occupiers have committed to space in new projects ahead of the lease expiry in their existing premises, the staggered return of space to the market has mitigated pressure on landlords to lower rental expectations to maintain occupancy.

The first-half of 2017 saw a good volume of pre-committed space in the upcoming premium developments such as Marina One and UIC Building in the CBD.

At Guoco Tower of Tanjong Pagar Centre, which is already 90 per cent committed, Thai rubber group Sri Trang Agro-Industry Public Company is moving into close to 6,000 sq ft of office space on the 25th floor in early December, letting go of its existing 5,100 sq ft office at One Raffles Place where it has been operating for more than 10 years.

Over the next couple of quarters, a gradual rental recovery of up to 5 per cent this year is likely to occur, due to the much depleted supply situation from 2018 and beyond and sustained GDP growth.

The Urban Redevelopment Authority is slated to release the second-quarter real estate statistics on July 28.

Some 58 per cent of leasing activities in CBD Grade-A offices in the first half of this year have been driven by technology companies, up from 13 per cent for the whole of last year. This came on news that Uber, Grab, Microsoft and Facebook are taking up office space in the CBD.

The share from financial firms dropped marginally from 22 per cent in 2016 to 19 per cent in H1 2017.

Adapted from: The Business Times, 13 July 2017