Shopee, the e-commerce arm of Singapore-based, New York-listed Sea Ltd, is understood to have fully leased a new business park development at 5 Science Park Drive.
The six-storey project, with frontage along Ayer Rajah Expressway, will have about 240,000 sq ft net lettable area. It is expected to receive Temporary Occupation Permit (TOP) soon.
Located near Kent Ridge MRT Station, the project is a redevelopment by Ascendas-Singbridge Group of the former Fleming and Faraday buildings.
Market watchers reckon Shopee, which has taken a long-term lease, could be paying a monthly rental of nearly S$6 per square foot, in line with market expectations for a new development in Science Park 1.
Shopee currently occupies a much smaller area, in the nearby Ascent building, which is also owned by Ascendas-Singbridge.
Shopee’s parent Sea Ltd, which operates South-east Asia’s biggest gaming platform, reported a wider third-quarter loss on rising investments in Shopee. Net loss increased to US$218 million in the three months ended Sept 30, 2018, from US$132.8 million a year earlier. Total revenue rose to US$204.9 million from US$94.1 million.
The company went public in October 2017. Revenue at digital entertainment unit Garena increased 41 per cent to US$112.5 million during the quarter, aided by the popularity of Free Fire, the first self-developed hit game at the company.
Revenue at e-commerce unit Shopee increased to US$65.9 million from US$2.8 million in the third quarter of 2017.
5 Science Park Drive, which is being entirely leased to Shopee, clinched the Green Mark Platinum award from Singapore’s Building & Construction Authority in 2018. The project’s architects are Multiply Architects and Series Architects. Nakano Singapore is the main contractor .
CBRE is understood to have brokered Shopee’s leasing deal. When contacted, the property consulting group’s senior executive director of advisory and transaction Michael Tay declined to confirm the group’s role in the transaction but noted that the occupier demand for good-quality newly developed business park space in Singapore has been very strong.
He added that 5 Science Park Drive is expected to be the only business park space project to be completed in Singapore this year and it has been fully pre-let before TOP.
The city-fringe submarket for business park space – which includes the Science Park and one-north areas, as well as the Mapletree Business City development – enjoys a very low vacancy rate compared to the “rest of the island”, which refers to locations further away such as Jurong and Changi, said Mr Tay.
In its latest MarketView report, CBRE Research also commented on this two-tier market.
“Occupiers have consistently shown preference for business parks with higher specifications, particularly those located in the city fringe. Despite the tightening availability and higher rents for such space, occupiers have not chosen to widen their space options to the older business parks located further away from the city.”
This contrast in occupier preference is reflected in the rental gap between the locations. CBRE’s data for the fourth quarter of 2018 shows that the average monthly rental value for city-fringe business park space was S$5.80 psf, about 53 per cent higher than the S$3.80 psf for the rest of the island.
Alice@Mediapolis in one-north, developed by a joint venture between Boustead Projects and a Middle East sovereign wealth fund, received TOP in late 2018 and already, about half of its approximately 350,000 sq ft NLA has been leased or is under negotiation, according to Mr Tay.