Alexandra Technopark was 94.1 percent occupied at the end of 2022
Google is surrendering a portion of its premises in Singapore’s Alexandra Technopark, the manager of the listed REIT that owns the property announced, as the California-based search giant shrinks its global office footprint.
Google Asia Pacific has exercised its contractual right under its lease to give up part of the premises effective 20 February 2024, Frasers Logistics & Commercial Asset Management, the manager of Frasers Logistics & Commercial Trust (FLCT), said in a filing to the Singapore Exchange.
The premises being surrendered comprise about 1.7 percent of FLCT’s gross rental income for the month of December 2022, the REIT manager added. Google is the second largest FLCT tenant in terms of gross rental income, accounting for 4.1 percent of the company’s total portfolio in December – behind only the Commonwealth of Australia, which contributed 5 percent, according to the trust’s most recent quarterly business update.
“The Manager will continue to carry out proactive leasing initiatives and asset management strategies for ATP and will make further announcements of any material developments, as appropriate,” the company said regarding Google’s retreat.
Pulling Back
Google set up a new base in Singapore in June 2019 by signing up for 344,100 square feet of space at Alexandra Technopark under a 5-year agreement, representing one-third of the property’s total net lettable area.
Google CEO Sundar Pichai has had to make some tough decisions lately (Getty Images)
The tech firm already occupied an estimated 500,000 square feet at the neighbouring Mapletree Business City II, but was unable to secure more space at the fully occupied project. Alexandra Technopark’s landlord said Google would move in during the first quarter of 2020.
Located in the southern part of the island along Alexandra Road, near the Labrador Park metro station in the southern part of the island, Alexandra Technopark is a campus-style business park with two office buildings spanning more than 1 million square feet.
Microsoft, Nokia and Hitachi are among the other tenants at the property, which underwent a S$45 million ($33 million) overhaul that was completed in early 2019. The project was 94.1 percent occupied and had a value of S$662.1 million as of the end of 2022, according to FLCT.
Google’s parent company Alphabet said in its fourth quarter earnings report that it expects to absorb about $500 million in exit costs associated with the company’s planned office space reductions in the first quarter of 2023. “We may incur additional charges in the future as we further evaluate our real estate needs,” the company added.
Last month, Alphabet said it was cutting around 12,000 jobs, representing about 6 percent of its workforce, as it faced a “different economy reality.” The workforce reduction come after the tech sector laid off at least 160,000 workers in 2022, according to Layoff.io, a site that tracks job cuts in the industry.
Google’s Asia Pacific headquarters has laid off an estimated 190 employees, about six per cent of staff, according to an account by The Register this week citing Christopher Fong, founder of a Google alumni group.
Tech firms in Singapore laid off about 1,270 workers from July to mid-November 2022, almost five times the 160 job cuts recorded in the first half of the year, the country’s Manpower Minister Tan See Leng said in November.
Major Landlord
FLCT, then known as Frasers Commercial Trust (FCOT) before its merger with Frasers Logistics & Industrial Trust, completed its acquisition of Alexandra Technopark for S$342.5 million in August 2009.
The REIT, which is sponsored by Singapore-based global real estate firm Frasers Property Limited, currently has a portfolio worth about S$6.7 billion across Australia, Germany, Singapore, the UK and the Netherlands. The 105-asset portfolio consists mainly of logistics and industrial assets, along with office and business parks and office assets in central business districts.
FLCT’s manager announced last month that Robert Wallace would be stepping down as chief executive of the REIT manager for family reasons, effective 31 May.
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