Shopee parent Sea consolidates Singapore footprint at one-north Science Park
SEA Ltd., the parent company for e-commerce platform Shopee is looking to consolidate its Singapore footprint in two main buildings – Rochester Commons, and 5 Science Park Drive – from the four main premises it currently leases in one-north, and Singapore Science Park.
The Business Times reported in November 2022, that Sea was looking for a new tenant to take over the approximately 200,000 sq ft office space they had leased in Rochester Commons, near the Buona vista MRT interchange station.
The market has heard that Sea stopped looking for a tenant to replace that space last year. The lease for the group in this development is said be around 10 years.
The space is located in the upper part (17-storey) of the Rochester Commons Project.
In the same tower is a shared executive learning centre called Catapult and the Citadines Connect Rochester Singapore. This serviced residence has a hotel license .
As layoffs from major US tech firms and banks extend to Singapore, the shadow office space could increase in 2018.
The campus-style project on a 2.4 hectare site includes 12 heritage black and white bungalows. Some are used as offices while the others as F&B, retail or other spaces.
Industry watchers said that the project was completed in stages in the second half 2022. However, the space leased by Sea has yet to be occupied.
The Singapore-based group, listed on the New York Stock Exchange, is expected to move in and furnish its new premises.
Justification for a change in strategy
Market observers have suggested that Sea changed its strategy in Rochester Commons partly because they found it difficult to find a replacement tenant who was willing to commit the entire 200,000 square feet of office space, and for such a long term lease.
An experienced business space-leasing expert said that since Sea’s leases in two other buildings, Galaxis and Solaris, are nearing expiration dates, it would be more sensible for the group give up these spaces without penalty and move into the Rochester Commons area.
Galaxis is the current headquarters of Sea, as well as its game development and publishing unit Garena. It’s directly connected to MRT Station One-North.
Sea leases substantial business park space in the building owned by CapitaLand Ascendas Reit – some reports say 270,000 sq ft.
Sea’s lease expires late next year
Sea occupies the two floors of the Solaris building, located at 1 Fusionopolis Drive (owned by Soilbuild Business Space Reit, a privatised company), with a total area of 44,000 square feet. The lease was originally due to expire in late 2018.
The market has heard that Sea, having expressed its desire to leave the space, found a tenant in the healthcare industry to take over one of the floors. Sea is expected vacate the floor in the coming months. The landlord is still looking for a tenant to occupy the other floor.
Shopee has leased the entire 5 Science Park Drive for a long time with CapitaLand Development.
The six-storey property with a net rentable area of about 240,000 sq. ft. was completed in 2019.
Sea refused to comment on BT’s inquiry.
Sea still has more than one year before the lease at Galaxis expires. However, analysts say that this could be a positive for the company, as it will need time to complete the fitting-out of the new offices in Rochester Commons.
Sea could still have some room in Galaxis. An observer said that things are fluid.
BT also learned that Sea planned to rent from CapitaLand Development, the business park space located at 7 Science Park Drive next to the building where Shopee holds a long-term lease.
union square residences havelock road
Sea, however, is reported to have canceled the deal in Q2 2023 and forfeited the deposit that it paid to CapitaLand.
Sea conditions to be tougher
Sea faces tougher operating conditions. This is especially true in the ecommerce sector, where Shopee, the merged entity between TikTok Shop Indonesia, GoTo’s Tokopedia and Boston-based Temu, is competing with aggressively in the region.
In a positive note, Sea’s choice to occupy its offices at Rochester Commons contributed to a significant drop in shadow office space stock in Singapore. This term is used to describe excess space in an existing lease that a tenant wants to give up by finding a new tenant.
CBRE Research data shows that Singapore’s shadow office stock has shrunk from 700,000 sq. ft. in Q1 2023, to 170,000 sq. ft. in Q4 2023. Shadow office space could increase this year as major tech firms in the US and banks move to Singapore.
