Google Leases 344,000 SqFt at Frasers’ Alexandra Technopark in Singapore

The manager of Frasers Commercial Trust has entered into an agreement with Google Asia Pacific that will see the California-based tech giant set up a new base in Singapore, according to an announcement to the stock exchange.

The maker of Gmail, Youtube and other online weaponry already occupies an estimated 500,000 square feet (46,452 square metres) at Mapletree Business City II and is now is set to move into a further 344,100 square feet of space across the street at FCOT’s Alexandra Technopark in the first quarter of next year.

Google, which was unable to secure further space at the fully occupied Mapletree project, will be occupying one third of the 1,038,060 square feet of Alexandra Technopark’s total net lettable area under a five-year agreement.

Google’s Second Hub in Singapore

The campus-style business park, which underwent a S$45 million ($33 million) renovation in 2017, is located near the Labrador Park metro station in the southern part of the island, a ten minute walk from Google’s existing base in Mapletree Business City.

The tech giant’s new base will be in one of the park’s two office blocks which are arranging on either side of a central hub that houses cafes, a food court, and outdoor dining facilities.

Microsoft, Nokia, and Hitachi are all existing tenants in the business park that features a medical clinic, futsal courts, exercise corners, and a childcare centre on site.

Frasers said in its announcement that Google will be paying a rent “comparable for the area”, with average rents for the development standing at around S$4.5 ($3.3) per square foot.

Tech Tenancy Brings Occupancy Rate to 93.7%

Frasers Centrepoint Asset Management (Commercial) Ltd, which manages Frasers Commercial Trust, secured the lease after six months of negotiation with the tech giant, and could see a boost to its top line after the REIT’s net property income from the property slid 10 percent in the first three months of the year.

On March 31, the committed occupancy rate at Alexandra Technopark stood at 59.2 percent, down from 68.6 percent at the end of 2018.

With Google on board, occupancy at the park will increase to 93.7 percent as of the date of the company announcement.

Microsoft Moves Out, Google Moves In

The Californian tech giant’s tenancy will offset the loss of tenants Microsoft, Nokia, and Hewlett-Packard from the business park.

Microsoft’s lease, which represents 3 percent of the REIT’s global portfolio rental income, will come to an end in January 2020, with the IT company surrendering the lease two years before the expiry date.

The REIT will also be losing Nokia when the Finnish telecommunications company’s two leases, which amount to 2.1 percent of Fraser Commercial Trust’s global portfolio’s rental income, expire in 2021.

These two losses follow the loss of Hewlett Packard at the end of last year when it vacated its 93,302 square feet of space, taking with it the equivalent of 3.8 percent of the REIT’s global rental income.