Office leasing declines amid cautious approach to expansion

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by Cheryl Tay

Singapore’s office leasing market continued to feel the impact of the weak economies of the US, China and Japan, as well as debt issues in the Eurozone, according to Colliers’ Asia Pacific Office Market Overview for Q1 2012.

In the CBD, average monthly gross rents for Grade A office space slipped 4.3 percent to S$8.55 psf. Office space occupancy rate fell from 91.6 percent in Q4 2011 to 90.9 percent in Q1 2012, partly attributed to the completion of the 1.3 million sq ft Marina Bay Financial Centre (MBFC) Tower 3 (pictured) in the Raffles Place / New Downtown micro-market.

Additionally, take-up rate declined, as large-space tenants in the banking and finance industries showed little interest in space expansion.

The report also stated that the weakening demand for office space all over the region can be attributed to the cautiousness of many firms towards expansion.

However, CBRE noted that aggregate net absorption in the region showed slight improvement on a quarter-on-quarter basis, buoyed by strong pre-leasing activity especially in new buildings in Singapore, Kuala Lumpur and Shanghai.

“Most leasing deals completed during the period were for smaller spaces,” it added.

“The CBRE Asia Pacific Office Rental Index was virtually unchanged on the previous quarter, posting negligible growth of 0.02 percent quarter-on-quarter. Occupiers remained cost conscious as the economic outlook continued to weaken.”

Colliers predicted that supply of and demand for office space for lease will likely contrast further over the next nine months, which could depress rents even more.

Still, as companies strive to maintain a presence in Singapore, the decline could be capped at 15 percent for the whole of 2012, unlike the 20 to 50 percent drop in 2009.

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Fire causes minor damage at Franklin County Commissioners’ office

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A fire damaged the Franklin County Commissioners’ office space, located at 14 N. Main St. in Chambersburg today, according to a release from the commissioners.

The fire started when sparks from demolition of the former Harmon’s Building ignited hay on the roof of the two-story addition to the commissioners’ office.

Workers were cutting through concrete containing steel rebar, which caused the sparks. Hay was being used to break the fall of potential debris from the demolition activity.

The addition houses office space for county administration. The fire started sometime after 1 p.m. and was extinguished by 3 p.m.

The fire damaged the roof above the second story conference room in the addition. Water for extinguishing the fire damaged the conference room and office space below the conference room. There was minor smoke damage to the main office complex, formerly known as the Chambersburg Trust Building.No injuries were reported.

The commissioners and county staff whose offices were at the building will be available by phone and email on Friday, however no visitors will be received at the location.

The commissioners’ office is expected to resume business as usual on Monday.

Office leasing declines amid cautious approach to expansion

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by Cheryl Tay

Singapore‘s office leasing market continued to feel the impact of the weak economies of the US, China and Japan, as well as debt issues in the Eurozone, according to Colliers’ Asia Pacific Office Market Overview for Q1 2012.

In the CBD, average monthly gross rents for Grade A office space slipped 4.3 percent to S$8.55 psf. Office space occupancy rate fell from 91.6 percent in Q4 2011 to 90.9 percent in Q1 2012, partly attributed to the completion of the 1.3 million sq ft Marina Bay Financial Centre (MBFC) Tower 3 (pictured) in the Raffles Place / New Downtown micro-market.

Additionally, take-up rate declined, as large-space tenants in the banking and finance industries showed little interest in space expansion.

The report also stated that the weakening demand for office space all over the region can be attributed to the cautiousness of many firms towards expansion.

However, CBRE noted that aggregate net absorption in the region showed slight improvement on a quarter-on-quarter basis, buoyed by strong pre-leasing activity especially in new buildings in Singapore, Kuala Lumpur and Shanghai.

“Most leasing deals completed during the period were for smaller spaces,” it added.

“The CBRE Asia Pacific Office Rental Index was virtually unchanged on the previous quarter, posting negligible growth of 0.02 percent quarter-on-quarter. Occupiers remained cost conscious as the economic outlook continued to weaken.”

Colliers predicted that supply of and demand for office space for lease will likely contrast further over the next nine months, which could depress rents even more.

Still, as companies strive to maintain a presence in Singapore, the decline could be capped at 15 percent for the whole of 2012, unlike the 20 to 50 percent drop in 2009.

Related Stories:

Office leasing activity remains stable: C&W

Demand for serviced offices steady across various locations

CBRE secures space for Thailand’s first CIMB Securities Executive Lounge

More from PropertyGuru:
S’pore office sector still hampered by economic uncertainty
Office leasing activity remains stable: C&W
Demand for serviced offices steady across various locations
CBRE secures space for Thailand’s first CIMB Securities Executive Lounge

Biz buzz

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Mountain View office campus to get upgrade

A Mountain View office complex has been bought for $90 million and will be renovated to meet rising demand for office space by technology companies hungry to expand.

Potentially 2,000 jobs could be created at the site, based on the existing 500,000 square feet of offices on the property. The campus is across the street from the Caltrain San Antonio station in Mountain View.

The 27-acre campus at San Antonio Road and Central Expressway will be renamed San Antonio Station. It’s the site of the former Mayfield Mall, which was converted to offices in 1986 and occupied by Hewlett-Packard (HPQ). William Lyon bought the site in 2011 and had planned to build houses on the property.

Now, new owner Rockwood Capital says it will revamp the property and turn it into Class A office space. Numerous big technology companies are attempting to find top-line offices to accommodate a recent burst of expansion.

Clif Bar headquarters receives LEED status

Emeryville-based Clif Bar said its East Bay headquarters has received LEED Platinum status from the U.S. Green Building Council.

The maker of natural and organic foods and drinks said its 115,000-square-foot headquarters is the first

building in Emeryville to receive the certification in the category of commercial interiors.

GreenVolts lands solar projects in Arizona

Fremont-based GreenVolts will provide three solar projects for the Arizona city of Somerton.

GreenVolts will supply projects that will generate 416 kilowatts of power for Somerton’s water treatment, public safety and water supply operations.

– Staff

The Best Office Space Play Today

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Retailers selling office supplies have had a strong year despite setbacks in the office supply market. For some big names, the proof is in the year-to-date performance of their shares. OfficeMax (NYSE: OMX  ) leads the pack with a 14.09% gain, followed by Office Depot‘s (NYSE: ODP  ) 9.76% climb, and Staples‘ (Nasdaq: SPLS  ) 7.78% gain. That’s a serious improvement from a year ago for all three of these players. Let’s take a closer look at the challenges ahead to uncover which of these three stocks is poised to outperform the others in the quarters ahead.

A challenging environment
A tough U.S. economy and pressure in Europe have crimped profitability in the office supply sector during the past few years. At the start of 2012, Staples said it would cut hundreds of jobs in Europe and Australia on weak sales in those areas. Office Depot also struggled with softness overseas. The company reported a 44% decline in operating profit for its first quarter due to ongoing costs from store closings in Europe. But it’s not all bad news.

Staples, Office Depot, and OfficeMax are successfully reducing costs, downsizing stores, and boosting online sales. The results are starting to show in their latest earnings reports. OfficeMax presented a better-than-expected first quarter, with earnings of $0.23 a share, when analysts were expecting just $0.16 per share. Office Depot, the second-largest office supplies retailer behind Staples, reported first-quarter profit that was in line with the Street’s estimates.

While we have to wait until Wednesday to get Staples Q1 results, Wall Street is looking for earnings per share of $0.30 for the quarter. Staples looks like the strongest of the three retailers, with a fortress-like balance sheet and more than $1 billion in free cash flow — an edge that’s only mildly reflected in its current share price.

SPLS Chart

SPLS data by YCharts

Staples’ strong Web presence gives it an advantage over competitors. The office supplier pulled in $11 billion in e-commerce sales last year, making it the No. 2 online retailer by sales, behind Amazon.com (Nasdaq: AMZN  ) . In fact, online sales now make up around 40% of Staples’ revenue. For comparison, RetailSails estimates that Office Depot earned $4 billion in e-commerce sales in 2011.

Looking ahead, Amazon’s recent launch of “AmazonSupply.com” could threaten Staples’ lead in the online business-to-business segment. Its new website offers everything from offices supplies like paper clips to harder-to-find equipment like a centrifuge, not to mention free two-day shipping for Amazon Prime members. While this could very likely cause problems for Staples and other B2B retailers down the road, the new site won’t be putting Staples out of business anytime soon.

Takeaway
A healthy balance sheet, plenty of free cash flow, and strict cost-cutting initiatives should boost performance for Staples going forward. Shares currently trade at a price-to-earnings ratio of 11, and offer a dividend yield that’s nearing 3%. For these reasons, I think Staples is a good stock to own today. If you’re not yet ready to own the stock, I encourage you to add it to My Watchlist, The Motley Fool’s free tool that lets you track and monitor your favorite stocks. 


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The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, “I will spend my last dying breath… and every penny of Apple’s $40 billion in the bank to right this wrong.” What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!




Great Opportunity for Small Businesses and Start-Ups as Serviced and Shared Office Rent Prices Fall

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CAMBRIDGE, England, May 15, 2012 /PRNewswire/ –

Rents asked for serviced and shared office space have fallen by more than £10 per month per employee in some cities, according to the Officegenie.co.uk Price Index.

According to figures compiled on more than 250,000 desks available on the UK market in the first quarter of 2012, three has been a general fall in prices being asked. 

Since January’s Price Index the average cost per desk has fallen from £309 to £302 in serviced offices and from £303 to £293 in shared offices. Prices for rented offices have fluctuated but largely held value.

Regionally serviced offices saw the biggest average falls in Birmingham and Leeds (down £12/£11 to £173/£209 respectively). Bristol fell by £7 per desk to £336, but London bucked the trend with a small rise (up to £509 per month per desk). Manchester is the only big city really bucking the trend, with rents asked rising steadily over the quarter from £194 to £204.

Office Genie co-founder Ciaron Dunne said: “As the news continues to worsen for the UK economy as a whole, commercial property landlords are clearly struggling to fill their office space. Many wanted to ride out the recession to hold the old rent values, but with no end to the recession in site it’s proving impossible.

“However, it can be seen as an opportunity for start-up and small home-based businesses to take another step towards professionalism by taking the plunge into renting their own office space. It can have a big impact on client perceptions and take young businesses to the next level.”

Officegenie.co.uk compiles data from available desks across the UK, from massive serviced and rented projects to individual businesses renting out their small bits of extra wasted space to deskers.

NOTES TO EDITORS

1. Office Genie is the UK’s leading desk space website, providing an independent environment to both let desks and compare them, for free. The original site, Desk Space Genie, was launched in 2009 as the first dedicated desk space office search engine. The name was changed to Office Genie in 2010 as the range of desks available spread to include serviced space and complete offices. The site is one of the most popular in its field, regularly featuring in the national press. http://www.officegenie.co.uk

2. All queries and interview requests should be directed to Chris Marling at Office Genie, chris.marling@officegenie.co.uk

Franklin County closes on old Campbell’s building

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BENTON — Franklin County is in the early stages of the planned transformation of an old furniture store building into county office space.

The county closed on the purchase of the old Campbell’s Furniture building on the Benton Public Square last week, Franklin County Board Chairman Randall Crocker said. The county has begun taking simple steps to clean up and secure the building.

The long-term plan is to move offices from the county annex building and some from the county courthouse into the building, located across the square from the courthouse.

The move would not only save money by closing the high-maintenance annex building but would also free up space in the courthouse for an expansion of the cramped circuit clerk’s office, more office space for court services and the possible addition of a small courtroom, Crocker said.

Both the Campbell building and the courthouse would require remodeling and the county is working with an architect on a preliminary cost estimate.

The county hopes to secure grant funding for the necessary renovation and start work this year.

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Funds sought for library project

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Plans to convert the former War Memorial Library into apartment space hinge on receiving state funding.

A financial package requesting $500,000 in funding for the $1.3 million project has been presented to the Southern Tier Economic Development Council, said Jack Benjamin, president of Three Rivers Development.

The renovation plans include six apartments on the upper floor and small office space on the first floor of the historic building, Benjamin said.

Tom Tranter, STEDC co-chairman, said a 21-member body will evaluate several projects seeking funding throughout the region. The application deadline is June 30.

“The committee will make a decision on the projects soon after that date,” Tranter said.

Benjamin said the apartments would be similar to those on Market Street.

The remaining funds needed for the project will be secured through bank financing and owner equity, Benjamin said.

Then, the site would be sold to local developer Chip Klugo, and work would likely begin this summer.

The Corning City Council recently passed a resolution supporting the rehabilitation project, which is consistent with the city’s master plan of historic preservation.

“We’ll finally get rid of an eyesore and do something with the site after all of those attempts,” said Councilman Hilda Lando, D-3.

The building, erected in 1897 on Pine Street, is listed on both the state and federal Registers of Historic Places. It originally served as the Corning City Club until fire destroyed most of the interior in 1926. It was the city’s library until 1975, when it was converted into office space for Steuben County.

For the last 20 years, it has sat empty. The building began to leak and deteriorate until Three Rivers Development bought it for $30,000 at a public auction in 1999.