Shopee’s parent Sea consolidates Singapore presence in Science Park one-north

Sea’s leasing agreement is due to expire at the end of next year.

Sea occupies about 44,000 sq. ft. of space on two floors at the Solaris building in 1 Fusionopolis (owned privately by Soilbuild Business Space Reit). The lease, which was initially scheduled to end this year, is now set to extend until the end of 2019.

According to rumors on the market, Sea expressed their intention to vacate this space. Therefore, the landlord had found a replacement tenant within the healthcare sector to occupy one of the upper floors. Sea should be vacating that floor in a few months. The efforts to find a replacement for the other level are still ongoing.

Shopee is occupying the whole of Science Park Drive 5 under a lease agreement with CapitaLand Development.

The six storey business park, with an area of 240,000 sq.ft. net lettable, was completed in 2019

Sea declined to comment after being contacted directly by BT.

Sea has over a full year until its lease at Galaxis is up. But some analysts think this could be good for the group because they will likely need more time to fit out their new offices at Rochester Commons.

Sea may retain some of its space in Galaxis. The situation is fluid, said one observer.

BT has learned that Sea originally planned to lease space from CapitaLand Development at Science Park Drive 7, next to the Shopee building, which has a long term lease.

SEA Ltd., parent company to ecommerce platform Shopee will consolidate its Singapore footprint by moving into two main building – Rochester Commons & Science Park Drive – instead of the current four main premises in one north and Singapore Science Park.

The Business Times stated in November of 2022 that Sea had been looking for a tenant to replace the roughly 200,000 sq. ft. of office space which it had leased at Rochester Commons, close to the Buonavista Interchange Station MRT.

According to rumours on the market, Sea has decided not to look for a replacement tenant in this space. The lease of the group at this development is for 10 years.

As major US banks and technology firms layoffs spread to Singapore, it is likely that the amount of shadow office space will increase.

The campus development is a 2.4 ha site that also contains 12 black-and white heritage bungalows.

The project was finished in phases by the second quarter of 2022. However the space that Sea leased has not been used, according to industry watchers.

The Singapore-based New York Stock Exchange listed group is expected fit out the premises and move in.

Sea, on the other hand, has reportedly canceled the agreement around Q2 2020, forfeiting any deposit it paid CapitaLand.

Motivation for changing strategy

Some market observers suggest that Sea changed the strategy for Rochester Commons. This may be because it found it difficult finding a tenant to lease all 200,000 sq ft – for an extended period of time.

One experienced agent who specializes in business space leasing said that Sea had two buildings with leases expiring soon – Galaxis Solaris. It would make sense for them to give those up without penalty, and take the Rochester Commons location.

Galaxis, a building directly linked to MRT One North, is currently the home of Sea’s headquarters and Garena (its game-development, publishing, and distribution unit).

Sea leases significant business park space, estimated to be around 270,000 sq. ft. by some sources. The building is owned and managed by CapitaLand Ascendas Reit.

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Sea – Tougher Operating Conditions

Sea has to contend with tougher conditions in its operations, especially when it comes to e-commerce. Shopee will be facing aggressive competition, including from TikTok Shop Indonesia’s merged entity and GoTo Tokopedia as well as Lazada and online fast-fashion retailer Shein.

Sea’s move to occupy offices that it has leased within Rochester Commons in Singapore has had a major impact on the reduction of shadow office spaces in Singapore. The term is used when a tenant wishes to release excess space from an existing lease agreement by finding a substitute tenant.

CBRE Research showed that Singapore’s Shadow Office Stock shrank between Q1 and Q4 2023 from 700,000.00 sq ft to 170,000.00 sq ft.

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