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On top of the impending redevelopment plans of AXA Tower, AXA’s exit comes with the company’s search for a smaller office space. Currently, only 15% of the 900 staff reports at the office.
With AXA Tower set to be redeveloped, the building’s anchor tenant – AXA Insurance – has revealed plans to relocate, reported The Straits Times (ST).
“We are making plans to relocate our office due to the impending redevelopment of AXA Tower, and are in the midst of identifying a suitable space that will meet our needs,” said AXA Insurance Chief People Officer Hayley Yap as quoted by ST.
A Perennial Real Estate Holdings-led consortium announced in June that it has sold 50% of its stake at AXA Tower to Alibaba Singapore, the parent company of which is one of the iconic tower’s anchor tenants.
Together with the consortium, Alibaba Singapore plans to redevelop the 50-storey building at 8 Shenton Way within the Central Business District.
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Built in 1986, the building was originally called the Treasury Building and was later renamed as Temasek Tower in 1997.
As an anchor tenant, AXA occupies at least 70,000 sq ft of space, which spans five floors. Since 2011, the building has carried its name, although AXA has declined to reveal the amount paid for the naming rights.
Yap shared that only 15% of the company’s 900 staff reports at the office, in compliance with the COVID-19 safe management measures for workplaces.
The company has offered its employees the work from home option since 2017, with the COVID-19 pandemic accelerating its adoption.
With more people now comfortable with working from home, more firms are reducing their office space – that could translate to significant cost savings.
Among them is Sompo Insurance, which slashed its office space at Singapore Land Tower by 40%. The company gave up one of the two floors it used to occupy within the building.
“We may have a smaller office space but we managed to accommodate all staff though currently only 50% of them are allowed to work in office,” said Sompo Insurance CEO Pui Phusangmook as quoted by ST.
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The move comes after a survey from its employees showed that most of them can effectively work from home.
Aviva’s spokesman also revealed that the company is also considering the possibility of cutting its office space.
Bloomberg recently reported that Mizuho Financial Group and Citigroup in Singapore are also planning to reduce office space.
Based on the latest market report, office occupancies and rent continue to be on the downtrend during the third quarter of 2020.
In its Q3 report, Knight Frank noted an increase in the amount of shadow space or space leased out but not actually occupied by tenants as corporates continue to explore the most efficient use of space via working from home rotations.
Office space demand continued to be driven by technology and e-commerce companies, while more traditional businesses contributed to demand for co-working spaces as corporates augment their space requirements with these flexible spaces, added the Knight Frank report.
Displaced tenants of buildings undergoing redevelopment, such as AXA, may also generate leasing demand.
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