Published December 14, 2012

Asia Square clinches year's biggest CBD office lease

Germany's Allianz to lease about 90,000 sq ft, and possibly more space

By Kalpana Rashiwala

[SINGAPORE] In the biggest CBD office leasing deal so far this year, German financial services provider Allianz Group is leasing around 90,000 square feet at Asia Square Tower 2.

The space is on levels 13, 14 and 15 of the 46-storey building, but it is possible that Allianz may also take up the 12th floor, which would expand its footprint in the building to 120,000 sq ft.

Allianz is expected to finalise the size of its space at Asia Square by the end of January next year.

Industry watchers say that the transaction is the biggest office leasing deal in the CBD since Marsh & McLennan leased 97,000 sq ft at Asia Square Tower 1 last year.

The latest leasing transaction is also the first for Asia Square Tower 2, which is slated to receive Temporary Occupation Permit (TOP) in Q3 next year. The tower will have 790,000 sq ft net lettable area of Grade A offices on levels 6-31.

A 305-room Westin hotel will occupy levels 32-46. Retail space will fill the first two levels.

Allianz will move into Asia Square at end-2013. This will be a consolidation for the group, which will exit two existing locations - Centennial Tower and Prudential Tower. Its space at Asia Square will also allow for some expansion.

The tower's large floor plates of about 30,000 sq ft means Allianz can house more than 500 employees on just three levels - allowing greater efficiency and collaboration across teams.

"We will benefit from having all our different lines of business housed under the same roof. This move underscores Allianz's commitment to this market and recognises Singapore's importance as a major financial hub and international business centre," said Gesa Walter, regional general manager, corporate communications, for Allianz SE.

The leasing deal was negotiated by Colliers International, acting on behalf of Allianz.

Said Calvin Yeo, executive director at Colliers: "Our team undertook a thorough survey of the office market on behalf of Allianz due to the intricacies of each business unit's requirements. Asia Square met a number of key requirements, including environmental sustainability, design, space utilisation efficiency, location, branding and long-term cost parameters."

One of Singapore's most sustainable commercial developments, Asia Square has clinched Leadership in Energy & Environment Core & Shell (LEED-CS) Platinum certification from the US Green Building Council, in addition to a Green Mark Platinum award from Singapore's Building and Construction Authority.

Said Ms Walter of Allianz: "Finding office space with built-in energy-efficient features supports our commitment to contribute to a low-carbon future."

Jones Lang LaSalle is Asia Square's sole leasing agent, representing its developer, MGPA, a private equity real estate investment advisory group focused on Asia-Pacific and Europe.

MGPA declined to comment on the rent Allianz will be paying or the duration of its lease. Making an educated guess, a seasoned office agent reckons that Allianz's per square foot (psf) monthly rent would be in the "high single digit" - considering that it is the maiden tenant in the tower and the quantum of space it is leasing.

Mark Rada, project director at Asia Square, told The Business Times that rents in Tower 2 are still on a case-by-case basis as completion is not due till Q3 2013. However, in the development's 43-storey first tower, which received TOP in June last year, MGPA is now asking for monthly rents of $12-15 psf, he revealed.

"We have four whole floors (levels 36 to 39) available, plus a few smaller pockets of space throughout the building which are all currently under offer," said Mr Rada.

Currently, 82 per cent of Tower 1's 1.25 million sq ft net lettable area of offices has been leased. Tower 1 also includes a Food Garden, which is patronised by more than 6,000 people daily on weekdays - "well above our expectations", said Mr Rada.

Tower 2 will have 40,000 sq ft of retail space of Levels 1 and 2 - of which one-third has been pre-committed, he said.

"We're trying to select the best tenants to meet the needs of the office population within the two towers and neighbouring buildings."