CapitaLand takes 50% stake in co-working operator The Work Project Kingdom

CapitaLand has been issued 13.5 million shares at an issue price of $1 each in The Work Project Kingdom.
CapitaLand has been issued 13.5 million shares at an issue price of $1 each in The Work Project Kingdom.ST PHOTO: JASMINE CHOONG

SINGAPORE - CapitaLand has - through subsidiary CL Kingdom Investment - invested $13.5 million for a 50 per cent stake in The Work Project Kingdom (TWPK), and will extend another $13.5 million in shareholder loans to the co-working operator.

The property developer has been issued 13.5 million shares at an issue price of $1 each in TWPK. The remaining 50 per cent stake in TWPK is held by a party unrelated to CapitaLand.

Meanwhile, TWPK is leasing space at Capital Tower and Asia Square Tower 2 from CapitaLand Commercial Trust (CCT), in which CapitaLand has a stake of about 30.1 per cent. It is leasing 41,000 square feet at Asia Square Tower 2 from Jan 1, 2019, to Dec 31, 2023, with an option to renew for a further five years. As a result, Asia Square Tower 2's committed occupancy rate will go up from 92 per cent as at June 30 to about 97 per cent.

It is taking a further 31,000 square feet spread out over two floors at Capital Tower from Jan 1, 2019 to Jan 15, 2024, with an option to renew for a further five years.

The estimated total rent payable for Asia Square Tower 2 and Capital Tower amounts to some $43.4 million over the entire lease terms.

Combining the flexible spaces at Capital Tower and Asia Square Tower 2, as well as TWPK's current offerings in Singapore and Hong Kong, a total area of 177,000 square feet (sq ft) of flexible spaces will be initially available to complement CapitaLand's core-flex offerings. As TWPK expands its footprint across Asia-Pacific, more space will be added.

The move is in line with CapitaLand's "core-flex" model to build offices of the future that will integrate conventional office space and flexible space.

Lucas Loh, president (China and investment management) of CapitaLand Group, said: "As the global workforce becomes more mobile and the demand for flexible work arrangements rises, office tenants require dynamic work spaces and customer-centric workplace solutions that promote productivity, improve staff retention and encourage an innovation culture. To build our 'office of the future' ecosystem, CapitaLand is going beyond traditional property management to providing more value-add services and community experiences for our office tenants. We believe this strategy will serve as a key differentiator from other office landlords."

Capital Tower will also feature an exclusive members-only club, collaboration spaces for project teams and the first movie theatre in the CBD (central business district). Fit-out works for the new offerings at Capital Tower and Asia Square Tower 2 are slated for completion in the first quarter of 2019. An app and a tenant portal for booking of space will also be ready around the same time.

In Singapore, CapitaLand's office portfolio in Singapore - largely those owned by CCT - has a total net lettable area of about 4.3 million sq ft. Office properties include CapitaGreen, Six Battery Road, 21 Collyer Quay, One George Street, Raffles City Tower and the upcoming CapitaSpring in Raffles Place.