46 / 62
MARKET OVERVIEW
SINGAPORE
BANKING AND FINANCIAL SECTOR SUMMARY
Banking and Financial Sector Trends
The banking and financial sector is the largest
occupier of prime space in the Central Business
District (CBD). The weak global economy took
a toll on the banking sector in Singapore during
2015, with an increasing number of banks opting
to reduce their space requirements in the CBD by
shifting back-oce sta¥ to cheaper business parks
in suburban areas. It was reported that Standard
Chartered Bank consolidated in Changi Business
Park while reducing their presence in Marina Bay
Financial Centre Tower 1, while Barclays gave up
space in One Raªes Quay South Tower. However,
there are signs of a nascent recovery in 2016 with
a few banks such as the Bank of Tokyo-Mitsubishi
UFJ and Julius Baer taking up prime space in the
upcoming Marina One. In addition, other segments
with strong growth potential such as insurance
and asset management are continuing to expand
their footprint and will likely drive leasing demand
in 2016.
Outlook, Opportunities & Strategies for Occupiers
During 2015, the overall Grade A CBD rent declined by 10.0% on the
back of the weak global economy and the supply overhang of 4
million square feet (msf) scheduled for completion over 2016-2017.
Competition is heating up as landlords of existing buildings hasten
to secure occupiers for their remaining vacant spaces before the
record supply enters the market. Tenants have started to receive
more generous incentives such as longer rent-free periods and fit-out
subsidies. With the oce leasing market continuing to face challenges
in the short term due to weak business conditions, the overall Grade A
CBD rent is projected to moderate by a further 7.0-10.0% in 2016.
Key Banking and Financial Services Sector Lease Transactions – 2015/2016
PROPERTY
SF
TENANT
TRANSACTION TYPE SUBMARKET
Marina One
140,000 Bank of Tokyo-Mitsubishi UFJ Relocation
Marina Bay
Marina One
100,000 Julius Baer
Relocation
Marina Bay
DUO Tower
74,000 MasterCard
Relocation
Bugis
SGX Centre 2
53,000 Aviva
Renewal
Shenton Way
Westgate Tower
33,000 Great Eastern Life
New Lease
Jurong
One Raªes Quay South Tower 30,000 QBE Insurance
Relocation
Marina Bay
Key Banking and Financial Services Sector Sale Transactions – 2015/2016
PROPERTY
SF
BUYER
PRICE
(US$ MIL)
PRICE
(US$/SF)
SUBMARKET
Asia Square Tower 1
1,299,220 Qatar Investment Authority 3,380
2,600
Marina Bay
78 Shenton Way (50% stake) 362,199 Alpha Investment Partners 302
1,665
Shenton Way
PWC Building (30% stake) 356,070 DBS Bank
202
1,890
Raªes Place
46%
76.32
-9.1%
% Occupancy of
Financial Sector
Prime Rent
(USD/Sf/Year)
Rent Growth
(YOY in local)
While 2015 saw cost-sensitive tenants relocating to
decentralized o ces and business parks, the trend has
reversed in 2016 with a wave of flight to quality as firms
seize the opportunity to lock in long leases in the upcoming
premium developments at attractive rental rates.
- June Chua, Executive Director, Leasing
46 ASIA PACIFIC BFSI OUTLOOK 2017