A Struggling Business Park Deals A Blow To Singapore's Regional Hub Ambitions

Reference: See here

(Bloomberg) -- Singapore's commercial real estate market has been a standout amid a global downturn, with one major exception.

Just nine miles from the gleaming skyscrapers that crowd the country's Central Business District sits a 71-hectare (175-acre), billion-dollar example of the city-state's push to create alternative business hubs. Changi Business Park, dubbed the "CBD of the East" was a big draw for tech giants including International Business Machines Corp. and Advanced Micro Devices Inc. Global banks from JPMorgan Chase ⁘ Co. to Citigroup Inc. have also situated their back-end staff there.

IBM, which occupied two namesake buildings with a total of 12 floors at Changi, has reduced its presence to two floors, according to people familiar with the situation, who asked not to be identified discussing private matters. UBS Group AG has cut the more than 110,000 square feet (10,220 square meters) of space it occupied by more than half. Standard Chartered Plc, which owns two buildings in the park, has been seeking to lease out two floors with at least 58,000 square feet of office space, according to a property listing.

During a recent visit to Changi, several buildings had "For Rent" signs plastered outside their modern glass facades, including the space IBM formerly occupied, which is owned by government agency JTC Corp. Hansapoint, a seven-story development with landscaped gardens and a gym, was only 36.5% occupied at the end of 2023 following UBS's downsizing. It was close to full previously. The Swiss bank declined to comment.

Hansapoint is owned by CapitaLand Ascendas REIT, one of Singapore's largest commercial landlords. The overall occupancy of the real estate investment trust's more than 2.3 million square feet of lettable space in the park has dropped to about 76% at end-2023, from nearly 94% four years earlier. Some of its under-performing business park units in Changi and elsewhere are being offered at a ⁘3-for-2⁘ rate - meaning that tenants can get one year's rent free if they sign a new three-year lease, according to people familiar with the matter and a promotional campaign online.