Business parks and high-tech sites gaining popularity

July 3, 2008

Business parks and high-tech sites gaining popularity

By Chua Hian Hou

BUSINESS parks and other high-tech industrial sites in Singapore have become increasingly popular among eligible tenants.

According to a new report released yesterday by CB Richard Ellis (CBRE), the overall occupancy rate at business parks probably hit a new high of 90 per cent last month, up from 88 per cent in March.

To rent space at sites like Changi Business Park, prospective tenants must meet certain criteria. These include carrying out research and development work.

Rental rates at these high-tech spaces are heading north. The rates may be cheaper than ultra-high-tech business parks and prime office space, but they were expected to have risen 6.8 per cent last month to $3.15 per sq ft per month from the first quarter.

The popularity of these sites, the report said, was due to the 'limited availability and continued rental increases' of office space in the Republic, although the dizzying upward spiral in rental rates had abated in recent months.

Nevertheless, prime office spaces can cost upwards of $16 per sq ft per month - far more expensive than in business parks.

Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50 per cent-plus rise that prime office rents registered in 2006.

More business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.

Biopolis Phase III, which will have a gross floor area of 41,505 sq m when completed late next year, is being built by Crescendas Bionix.

Solaris, formerly known as Fusionopolis Phase 2B, will be built by Soilbuild Group Holdings. When completed by June next year, Solaris will have a gross floor area of 50,271 sq m.

Industrial landlord JTC Corp has also launched a new 'concept and price' tender at Changi Business Park.

This site will have a maximum gross floor area of 47,006 sq m, of which 40 per cent is designed for hotel and retail use. The tender will close next month.


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