Prudential said to have leased 150,000 sq ft office space at Labrador Tower

Most of the insurer’s agency offices operating at 51 Scotts Road are expected to move to the new project in Pasir Panjang by SP Group

Mar 08, 2023

INSURER Prudential Singapore is understood to have leased about 150,000 sq ft of office space at Labrador Tower, being developed by SP Group above a large underground electrical substation.

Most of Prudential’s agency offices operating at 51 Scotts Road, next to Newton MRT station, are expected to be relocated to Labrador Tower, which is slated for completion next year.

The certified Green Mark Platinum Super Low Energy development along Pasir Panjang Road will have about 700,000 sq ft lettable office space on 29 floors of a 34-storey tower. The project will include retail and F&B space on Levels 1 and 2 of a low-rise block and some F&B space on the top level of the office tower.

The office tower will have panoramic views of the sea and greenery. The project will be directly linked to Labrador Park MRT station next door.

June Chua, executive director and head of tenant representation for Singapore at Colliers, estimates that the initial office anchor tenants at Labrador Tower can be expected to pay a monthly gross effective rental rate in the mid-S$7 per square foot (psf) region. “As the building fills up, the rental rates for smaller tenants could be in excess of S$8 psf,” she added.

Chua also said that the completion of Labrador Tower will help to “anchor the transformation of the Alexandra CBD-fringe office precinct”.

Scotts Road building on transitional office site

Market observers are not surprised that Prudential agency offices will be moving out of the four-storey building on Scotts Road. The property was developed by Scotts Spazio on a transitional office site sold by the state with a 15-year leasehold tenure that expired in November last year. The Singapore Land Authority (SLA) has granted Scotts Spazio a two-year extension of stay, The Business Times understands.

Market watchers suggest that Scotts Spazio could potentially seek a further extension from SLA closer to when the current two-year term ends in November 2024. However, there is no certainty such an application will be granted; the decision will depend on the government’s development plans for the site.

SLA did not grant a request by City Developments’ subsidiary Glades Properties for an extension for its transitional office site at 11 Tampines Concourse on which it built a three-storey project; the lease expired last month.

When the plot was sold, it was zoned “reserve site”, meaning the specific use for the area had yet to be determined. But since the 2019 Master Plan, its zoning has been reflected as “residential”.

The 51 Scotts Road property, with about 150,000 sq ft lettable area, is one of the largest premises leased by Prudential Singapore for use by its agencies.

The new location at Labrador Tower will be near another sizeable Prudential agency office premises - about 66,000 sq ft on seven levels of UE BizHub West in Alexandra Road.

This was set up in 2021 to house Prudential agencies that used to be in the former Fuji Xerox Towers on Anson Road, before it was vacated for redevelopment by its owner CDL.

The 51 Scotts Road building is one of seven projects developed on 15-year transitional office sites which the government sold during the 2007 to 2011 period to quickly tackle a shortage of office space. In all, the completed projects on these seven sites generated about a million sq ft of offices.

The building occupied by Prudential stands on the first such site that was sold.

Projects were also developed on another two transitional office sites along Scotts Road. One is at 50 Scotts Road, home to advertising group WPP and some of its related entities. The lease on the site was due to expire in August this year; SLA has granted the project’s developer, Sun Venture (S) Investments, a two-year extension of stay till August 2025.

Next door, UOB Kay Hian Trading is also understood to have applied for a two-year extension for its site; the lease expires in July this year. The property bears the address 8 Anthony Road.

SLA has granted a three-year extension of stay to Mezzo Properties, for its Mountbatten Square project at 229 Mountbatten Road on a transitional office site; the lease for the site is due to expire next month.

The 15-year leases for the remaining two transitional office sites sold by the government still have some way to go before expiry. One is at 53 to 63 Mohamed Sultan Road (developed into Sultan Link); the lease will expire in June 2025. The lease for the other site, at 223 Mountbatten Road, will run out in February 2027.