Cargill is first tenant at CapitaGreen

CAPITAGREEN, a new 40-storey Grade A office tower that will be completed on the former Market Street Car Park site in the fourth quarter, has landed its first tenant. Cargill is said to have signed a lease for close to 50,000 square feet on slightly over two floors.

The monthly rental is understood to have crossed $9 per square foot (psf).

Swiss private bank Bordier & Cie is also thought to be on the verge of inking a lease for about 11,000-12,000 sq ft – or half a floor – in the building. It is expected to move out of its current location at GB Building along Cecil Street.

A serviced office operator is also in discussions to lease a floor at CapitaGreen, according to market talk.

Cargill will be exiting The Concourse along Beach Road, where its lease is understood to run out in the third quarter of next year. Singapore is the regional hub of Cargill in the Asia-Pacific.

It established its Singapore office in 1981 and its team here comprises about 500 employees, according to the group’s website. Four of Cargill’s business units are headquartered in Singapore alongside a number of regional and global trading desks.

CapitaCommercial Trust has a 40 per cent stake in the CapitaGreen project, which will have about 700,000 sq ft of net lettable area.

In January this year, Lynette Leong, CEO of CapitaCommercial Trust Management Ltd, said that as a wish-list, the trust hoped to pre-lease at least half of this space before its completion in Q4 and then fill up the rest of the building later to capitalise on rising office rents.

Ms Leong had also said then that the group would be very selective on its first few tenants in the building, as they are expected to be “loss leaders” vis-a-vis the $12-14 psf – on a stabilised basis – monthly rental target assumption for the project. “If we have to drop rents to attract them, we might as well attract very good names so that they can help us in the leasing momentum,” she said during the group’s Q4 2013 results briefing.

CBRE is the marketing agent for CapitaGreen.

Two podium floors will have about 25,000 sq ft each while the other levels will have 22,000 sq ft per floor. The environmentally friendly development will feature a large expanse of greenery as well as sky terraces on levels 14 and 26. About 55 per cent of its facade will be covered by living plants, while a cool void at the centre core of the property will permit air flow throughout the building, regulating the building’s temperature.

Premium and Grade A office rents in Raffles Place and New Downtown continued to climb in Q1, according to a recent report by Colliers International. The quarter also saw office vacancies shrinking and firms taking a proactive approach to reviewing expansion and relocation options to lock in rents before they rise further.

In the business park arena, Canon has inked a lease for 150,000 sq ft at Galaxis at Fusionopolis Phase 5 in one-north. Galaxis is expected to be completed towards year-end, in time for Canon to make a move from Keppel Bay Tower in the Harbourfront area, where its lease expires in late 2015.

BT understands that the business park space at Galaxis will cost Canon $5-6 psf a month – at least 20 per cent below the rent it would have had to pay on a lease renewal for the 90,000-plus sq ft office space it occupies at Keppel Bay Tower.

Another major tenant is believed to have signed up at Galaxis for about 70,000 sq ft. Sources suggest this is likely to be an IT company, perhaps Oracle.

Chris Archibold, Jones Lang LaSalle’s head of markets, said both the office and business park leasing markets have got off to a strong start this year. “There’s quite a lot of activity around new buildings that will be completing this year. Vacancy levels in existing office buildings owned by the major office landlords are very low – mostly below 3 per cent. Occupiers on the expansion trail include companies in the social media/IT, pharmaceutical and fast-moving consumer goods sectors.”

Agreeing, Colliers International’s executive director of office services Marcus Loo said: “Optimism has returned to the Singapore office market and there’s definitely a feel-good factor among landlords. At the end of the day, while rents are going north, landlords need to be mindful that companies are not flush with cash overnight to spend millions on capital expenditure to move into new buildings.”

The Business Times – April 11, 2014