Meta giving up 7 office floors totalling 115,000 sq ft at South Beach Tower

Landlord South Beach Consortium was informed in June 2023 and is in advanced negotiation with a replacement tenant for two whole floors

Feb 08, 2024

THE landlord of South Beach Tower is in the advanced stage of securing a replacement tenant for two of the seven office floors leased to Meta in the 34-storey building.

The tech giant will not be renewing its lease in the building expiring at the end of September this year. It is understood to have started moving its staff out of South Beach Tower in the first half of last year, consolidating its teams at Marina One.

Samantha Tan, general manager of South Beach Consortium (SBC), which developed the South Beach mixed-use integrated project, told The Business Times that the company had received Meta’s confirmation in June last year that it would not be renewing its lease in South Beach Tower. This was after the tech group’s second major global layoffs in March 2023.

The seven floors – which are in the high zone of the tower – add up to 115,000 square feet (sq ft) of net lettable area; this is about 22.7 per cent of the total 507,395 sq ft of offices in South Beach Tower.

The offices are across 31 floors, with typical floor areas of 18,000 sq ft to 20,000 sq ft.

Besides offices, the South Beach development, completed in phases in 2015 and 2016, also includes the JW Marriott hotel, retail space and luxury residences.

Tan said that although a deal has been negotiated with a prospective replacement tenant for two whole floors from the Meta portfolio, the lease agreement has yet to be signed. She declined to give any details of the profile of the tenant.

Another two floors in the Meta portfolio will be subdivided to cater to tenants that do not require big spaces – such as those in the consumer and private wealth sectors. “For the remaining three floors, we’ll respond to market demand in deciding whether to rent them out on a full-floor basis or to carve them into smaller units,” added Tan.

Meta was a “pioneer tenant” at South Beach Tower, having moved in after the Temporary Occupation Permit for the tower was obtained in 2015. It is also the biggest tenant in the tower.

Tableau departure

There were a couple of smaller departures last year. Tableau did not renew its lease for two floors when it expired in August 2023. The data-analytics software maker, which was acquired by Salesforce in 2019, moved into its parent’s office at Suntec City.

Pharmaceutical company Sanofi-Aventis Singapore also used to lease two floors at South Beach Tower, but renewed the lease for only one level, allowing the lease on the other floor to expire in June 2023.

Datadog a new tenant

On a more positive note, one of these three vacated floors has been leased to Datadog. The Nasdaq-listed company provides cyber security for cloud applications.

“The pipeline of ongoing lease enquiries for South Beach Tower is healthy. We are in advanced negotiations with businesses in various industries such as professional services, transportation and consumer goods, and expect more conversion to commitment in the coming months,” noted Tan.

“We anticipate market sentiment to pick up in the second half of 2024 as interest rates and inflationary pressures ease, the economy strengthens and companies regain confidence to embark on their expansion plans.”

Asking rents at South Beach Tower are between S$12.50 per square foot (psf) and S$13.50 psf per month.

Some S$4 million of asset enhancement works are slated to take place in the second half of 2024 and in 2025 at the South Beach project. Most of the renovations will be in the office tower. These include enhancing the main lobby on the ground floor, the two sky gardens on levels 11 and 21, and the roof terrace on level 34 into multi-purpose social spaces where tenants can hold product launches and other events.

SBC is 50.1 per cent owned by City Developments : C09 -1%, with IOI Properties Group holding the remaining 49.9 per cent.