Amazon (AMZN) plans to expand its Asian operations after signing a lease for about 369,000 sq. ft. in Marina Bay, Singapore. According to Business Times, the new lease at IOI Central Boulevard Towers comprises 70,000 sq. ft. of office floor space in development and 9 office levels of 25,400 sq. ft. The project, which is slated for completion in October next year, will also include 40 office floors.
According to a Bloomberg report, Amazon could end up paying a gross monthly rent of about $7 (SGD10) per sq. ft. for the new lease at IOI Central Boulevard.
Tech Giants Are Replacing Banks in Real Estate
The latest lease comes on the heels of Amazon taking over three office floors from Citigroup (C). Tech giants are investing big in real estate in the city state’s central business district, which was initially dominated by financial institutions. The investment drive into Singapore comes on the heels of Hong Kong’s diminishing regional appeal.
According to The Straits Times, TikTok owner ByteDance has opened talks to lease some 120,000 sq. ft. to 130,000 sq. ft. at Capital Tower, previously occupied by JPMorgan Chase & Co. (JPM). The Chinese tech giant seeks to expand its operations in Singapore.
According to property consultancy firm JLL Singapore, office rents in Singapore’s central business district are expected to rise to their pre-pandemic peaks by the third quarter. Rents have risen for five straight quarters to $10.74 per sq. ft. per month.
Wall Street’s Take on AMZN
The Street is bullish about the stock, with a Strong Buy consensus rating, based on 38 Buys and one Holds. The average Amazon price target of $178.55 implies 54.54% upside potential from current levels.
Bloggers Are Bullish About Amazon
According to TipRanks data, financial bloggers’ opinions are 87% Bullish on AMZN, compared to a sector average of 63%.
Key Takeaway for Investors
The huge investment in office space in Singapore signals Amazon’s focus on pursuing growth opportunities in the country. The expansion should help the company offset any slowdown in Hong Kong.
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