Singapore-based project management firm Merx has had a very busy year in 2012. The company continues to diversify its portfolio with a view to guarding against slowdowns resulting from the broader global economic situation.

Tag Heuer

Continuing to venture beyond its traditional core business of corporate office work, Merx has completed a number of projects in retail and hospitality, as well as some industrial, data centre and new-build projects.

As 2012 draws to a close, we sit down with William Forwood, Managing Director of Merx, to find out what he expects for Singapore’s corporate office sector 2013.

William Forwood, Managing Director of Merx

“We need to look at the basic economics of supply and demand. In terms of corporate offices, there is not as much supply coming onto the market within 2013 itself. Asia Square Tower 2 will come online in the third quarter next year, so that’s a significant amount of real estate, and there are other smaller buildings. But there are 3 or 4 buildings under construction now that won’t be online during until 2014 onwards.

Porsche Design

“From what I can see, there are still decent chunks of available space in some of the newer developments that have come online in the last 24 months. And I think there’s quite fierce competition around for new premium tenants by these landlords. Partnered with this is the portfolio of ageing office buildings that are gradually being upgraded. As the ‘secondary supply’ rents increase, the gap becomes narrower between new ‘Grade A’ space and good quality secondary space that has a point of difference. It will probably tip the more established blue chip clients into Grade A brand new buildings. I do see, though, that the demand for increased office space footprints (i.e. headcount growth) by the MNCs is levelling.

Stefano Ricci, Marina Bay Sands

“I thought that economically, 2012 was going to have a harder landing in Singapore than it did. I don’t think 2012 would have been the best year for many companies, but most companies we work with peddled through the year relatively steadily. Since 2009, there’s almost been a ‘flight to Asia’ for a lot of firms to hedge positions in Europe and North America. And if you’re going to be in Southeast Asia, Singapore is an obvious choice.

Stefano Ricci, Marina Bay Sands

“My view is that 2013 is going to be a tougher year than 2012. Many contracts that were assigned in late 2010 or 2011 carried companies through the 2012 period. There was still quite a bit of activity around Towers 2 and 3 of Marina Bay Financial Centre and Asia Square. Next year, some of the agents are not predicting as much activity.

“I think 2013 will be a different landscape. Companies will continue to maximise their current operational expenditures and reign in capex. So instead of moving, they might do an upgrade and push for increased headcount into their existing space.”

Merx
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