About 70% of Frasers Tower is already pre-committed even before completion.
Even before Frasers Tower is completed, an array of leases has already been done, resulting in the building already being 70% pre-committed.
DBS Equity Research said this is generally positive as the major new supply entering the market in 2018 is now substantially leased out, another boost that Grade A rents for newer office buildings should start on an upward trajectory.
Amongst identified tenants are petrol company Total S.A. that committed 15% of the property, Microsoft with 19%, Shiseido with 8%, and Sumitomo Corp with 6%.
Gross rent for Frasers Tower is estimated to have appreciated by 10-15% over the past year.
The broker identified a “flight to efficiency” theme that continues to play out amongst office tenants as better office specifications and connectivity are key factors that lure some of these tenants to relocate.
The reported list of tenants is moving out from other CBD offices and around the vicinity, some of whom are expanding their presence in Singapore.
Major completions in 2018, which is a year of low supply, are now already taken up. About 70% of 634,000 sqft in Frasers Towers is now leased, whilst 93% of 194,000 sqft Robinson Towers is now leased.
"We believe this will be a catalyst for Frasers Centrepoint Limited (FCL), office REITs (Suntec REIT and Keppel REIT) to rally further," said DBS analyst Derek Tan.
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