Cost-cutting tenants ditch CBD offices for cheaper turf

Google bids Asia Square farewell for Mapletree Business.

Decentralisation was the frontrunner of office space cost-saving measures for companies in 3Q15 and it’s likely to stay popular, according to a report by Knight Frank.

Companies that were qualified for business park space up and went. For instance, Mapletree Business City 2 will be making 200,000 sq ft worth of room for IT giant Google after the IT giant leaves its current Asia Square Tower 1 location. Medical supplier Covidien will also be setting up shop in a 50,000 sq ft space in Mapletree after it bids farewell to its current home at VisionCrest Commercial.

Companies that were not qualified for business parks but were looking to save some cash on office space rent took to less prime locations outside of Central Business District (CBD).

“More of such relocations in the next few years can be expected as companies look for ways to lower their office rental costs and there is a steady stream of upcoming supply of office space in fringe and suburban areas,” the report affirms.

Companies looking for less costly and well-connected office space alternatives outside of CBD can look forward to a supply of new or renovated buildings in the coming years- 465 Alexandra Road will finish renovations in 4Q15, and Duo Tower is expected to be complete by 2017.