Archive for category: Misc

A wave of new gyms has popped up in Singapore’s Central Business District this year. From Anarchy Club, a 3,800 sq ft class-based and strength training boutique gym located on the fifth floor of 61 Robinson Road, to Sparkd, a brain-body fitness gym of 1,570 sq ft situated on the same floor of the building; S30, a strength-training gym that opened on the second floor of Cecil Building at 137 Cecil Street in July; to Lab Studios, a pilates, barre and yoga studio that debuted on the second floor of a shophouse on Stanley Street in February – these facilities have added to the already existing Sphere Gym, a 4,800 sq ft training and recovery gym at Cecil Building, as well as the Revolution spin studio that debuted at Frasers Tower in 2021.

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Luke Moffat, Regional Managing Director and Head of CBRE Advisory and Transaction Services, Asia Pacific, believes that this is due to a shift in lifestyle: “Fitness and wellness facilities are becoming more popular, and that’s to do with a healthy lifestyle,” says Moffat. “Features like gyms, end-of-trip facilities, nursery rooms, massage rooms, good F&B or good-quality air filters are the sort of things you need to have for the well-being of the staff.”

CBRE’s 2023 Asia Pacific Office Occupier Sentiment Survey, which was launched in June, revealed that office occupiers prioritise accessibility to public transport (71%), carpark (50%), sustainable building features and operations (48%), shared meeting space (45%), flexible office space (36%), F&B options on site (62%) and fitness facilities (45%).

It appears that wellness has an even bigger impact than sustainability, and Moffat points out that green-certified Grade-A buildings with good ESG (Environmental, Social and Governance) ratings are highly saleable due to their better views, higher specifications and more amenities.

The return to office

The survey found that 69% of office workers value the quality of the work environment more than pre-pandemic, and Moffat notes that a hybrid working model – which provides staff with more flexibility – is here to stay.

Asia Pacific leads the US and Europe in the return to the office, with its average office utilisation rate standing at 65% in March 2023 compared to just 50% in the other two major regions.

When it comes to green buildings, CBRE’s survey revealed that few occupiers are willing to pay a rental premium, with fewer than 25% of the respondents considering it and the premium lower than 5%. The low green rental premium could be associated with the high rate of green building adoption in Asia Pacific, with 43% of Grade-A office buildings being green-certified as of 2022.

This Tampines Ave 11 Condo Capitaland development stretches over an approximate two-hectare site of 566,183 sq ft along Tampines Avenue 11. It is designed to be an integrated residential, commercial, and business centre, complete with a range of lifestyle offerings for the Tampines community and beyond. The development consists of 522 residential units, a wellness center, a mega supermarket, and other commercial spaces.

Moffat believes, however, that the premium would be more evident if one compared a green-certified Grade-A building with an older Grade-B building that is not green-certified, as old buildings with no amenities, older finishes, and no views will take longer to lease out.

Tight market conditions

In Singapore, CBRE reported that the office rental index increased by 2.3% q-o-q in 2Q2023, though the growth rate slowed down from the 5.1% recorded in 1Q2023.

The monthly rental rate in Category 1 office space accelerated by 6.7% q-o-q, thanks to the tight vacancy levels in prime office buildings. Vacancy rates for Category 1 buildings dropped to 9.2% in 2Q2023, matching vacancy levels in 2Q2020 when the pandemic just began.

Nevertheless, CBRE warned that rents may come under pressure in 2H2023 due to the addition of a new prime commercial development and elevated levels of shadow space. The new development is IOI Properties Group’s IOI Central Boulevard Towers, which topped out on Aug 28.

The Grade-A office development, with 1.26 million sq ft of office space and a 30,000 sq ft retail and F&B space at Marina Bay, is expected to receive its temporary occupation permit in 1Q2024.

Flight to new-build and flight to green will remain prominent trends. Although occupiers have ample options of upgrading due to the high regional vacancy of 18%, expansionary sentiment has been subdued due to a more prudent attitude towards portfolio planning.

Overall, it is clear that CBRE’s survey points to a high demand for higher-quality office space and future-proofed buildings. With the abundance of new gyms and wellness amenities opening in the Central Business District, and their positive impacts on tenants, it certainly appears the right time for developers to consider how to best nurture these opportunities.