GuocoLand has achieved 90 percent take-up for its 709,000 square foot (65,868 square metre) Guoco Midtown office project, based on pre-commitments, marking a fresh milestone for Singapore’s once-fringe Bugis area as an aspiring business location.
Guoco Midtown is set to welcome a community of more than 10,000 people daily — including business executives, residents, shoppers and visitors — as GuocoLand positions the integrated development as a “City of the Future” to rival Singapore’s downtown core, according to a Tuesday announcement.
Jointly developed by GuocoLand, the SGX-listed development arm of Malaysia’s Hong Leong Group, and its parent, Guoco Group, the S$2.4 billion ($1.8 billion) complex connects directly to Bugis interchange MRT station. The first phase, which is located along Beach Road, comprises the 30-storey office tower, two condominiums, two retail areas and Midtown House, a conserved building formerly known as Beach Road Police Station.
“Through Guoco Midtown, we will bring further transformation to the Beach Road-Bugis district and add new life to an already vibrant part of Singapore to achieve our vision of turning it into Singapore’s Midtown,” said Valerie Wong, managing director for asset management at GuocoLand.
While Bugis has traditionally been considered the outer edge of downtown, GuocoLand is getting office rental rates close to CBD levels for Guoco Midtown. Listings on local property portals show asking rents of S$13 to S$14 per square foot per month at the office tower.
Gross effective monthly rents for Grade A office space in Bugis averaged S$10.45 per square foot in the third quarter, according to Cushman & Wakefield’s Marketbeat report. By comparison, rents during the period ran at S$10.42 in Shenton Way/Tanjong Pagar, S$10.73 in Raffles Place and S$12.67 in Marina Bay, averaging S$10.67 in the central business district as a whole.
One prescient bet on Bugis was made by Hong Kong’s Gaw Capital Partners, which in 2019 teamed up with Allianz Real Estate (now PIMCO Prime Real Estate) to acquire the Duo Tower and Duo Galleria opposite the Guoco Midtown site for S$1.6 billion (then $1.2 billion), inking one of the city’s biggest office deals that year.
Speaking at the Mingtiandi Singapore Forum this month, Gaw’s managing director for investment, Imelda Tham, characterised Bugis as “very vibrant” with a good mix of offices, retailers, hotels and tourist locations.
“It has a number of arts colleges there, SMU is there,” Tham said. “So there’s always a very young population circulating in the area.”
New Revenue Engine
In August, GuocoLand reported a full-year profit decline of 47 percent on lighter investment gains and rising financial costs. But revenue surged 60 percent as the company began recording rental income from Guoco Midtown’s office segment.
The building received its temporary occupation permit in January. Tenants include shipping giant Pacific International Lines, chemical company BASF and ad agency Publicis Groupe, with the latter leasing 55,000 square feet of office space across more than one floor of the tower and a portion of the conserved Midtown House building.
The complex also features the Midtown Bay and Midtown Modern condo towers, which together are expected to offer more than 700 homes.