Singapore – TECH giant Apple, which has just announced an analysts-beating fourth-quarter profit of US$11.1 billion, is in expansion mode in Singapore. In addition to reports of plans for its first Singapore store at Knightsbridge mall, it is said to be leasing a chunk of business park space at Innovis in Fusionopolis Two in the one-north area.
According to sources, it has leased about 215,000 square feet at the 18-storey Innovis, one of the three blocks in the recently opened Fusionopolis Two project developed by JTC Corporation.
With Apple occupying about half the space in the tower, the 18-storey Innovis will be fully let.
While the space that the tech giant has signed up for is predominantly zoned for business park use, there is a small office space component as well. The company, which is expected to use the new space primarily for research and development, is understood to have wanted even more space at Innovis but had to contend with what was available. Others who signed up earlier at the same tower include Japanese IT group NEC, private equity firm Credence Partners and Sodexo. The Agency for Science, Technology and Research (A*Star) also occupies some floors at Innovis.
Fusionopolis Two has a total gross floor area of 103,635 square metres (1.12 million sq ft) spread across the three towers – Innovis, Kinesis and Synthesis. Four research institutes under A*Star occupy the whole of Synthesis as well as some floors in Kinesis and Innovis.
Market watchers say that Apple’s presence in Innovis will boost Fusionopolis’s standing as an innovation hub and create buzz for the one-north locale in general. Already, there is talk that owners of some of the neighbouring developments are starting to see a pick-up in enquiries from potential tech tenants.
A spokeswoman for JTC declined to confirm if Apple is a tenant at Innovis. Attempts to reach Apple on the matter were unsuccessful.
Apple’s move into Innovis is part of its expansion in Singapore. Its operations are currently based in two neighbouring buildings in Ang Mo Kio – one of which is a built-to-suit facility at 7 Ang Mo Kio Street 64 on a 30-year government lease expiring next year with an option for renewal. A lease renewal is likely to entail redevelopment as the maximum gross floor area has not yet been tapped.
Apple is believed to be holding discussions with the authorities on the property. Among the functions located in the facility are research and development, and sales and marketing. To cope with its growing business activities in Singapore, which is also a regional headquarters for some functions, Apple expanded to the next-door UE BizHub Central in 2012, where it has leased about 50,000 sq ft spanning a couple of floors in one wing of the development. Apple Campus is located within this space.
Earlier this year, Apple was reported to have inked a lease for around 35,000 sq ft of office space on levels 29 and 30 at CapitaGreen along Market Street in the CBD to house its sales and marketing staff – with options to lease 60,000 sq ft more space on three adjoining floors in the same building.
Sources say that the option for the additional space has lapsed, with speculation mounting whether Apple could give up even the two floors for which it has signed a lease.
That said, a leasing agent argued that doing so would require Apple to find replacement tenants acceptable to the landlord in addition to compensating it for any rental shortfall if the new tenants pay a lower rental rate than that contracted to Apple. “Financially, it would make more sense for Apple to just occupy the two floors at CapitaGreen itself, given that it is expanding like crazy.”
Apple’s lease at CapitaGreen was reported to have been signed late last year probably at around S$11-12 per square foot monthly rent.
Based on information on JTC’s website, the monthly rents listed for Fusionopolis Two translate to S$4.83 psf for business park space and S$5.57 psf for office space – although market watchers expect big tenants to enjoy a discount on these rates.
Apple’s 215,000 sq ft lease at Innovis is one of the biggest leasing transactions for business space in Singapore this year following Google’s lease for around 280,000 sq ft of business park space at Mapletree Business City II; located in the Pasir Panjang Road/Alexandra Terrace area, the development is slated to receive temporary occupation permit by June next year.
Meanwhile, fellow IT giant Microsoft, which was earlier reported to be mulling a move to MBC II, has decided to stay put at One Marina Boulevard in the CBD. The group is expected to renew its lease in the building, where it occupies slightly over 100,000 sq ft.