(Bloomberg) — Singapore’s commercial real estate market has been a standout amid a global downturn, with one major exception. Just nine miles from the gleaming skyscrapers that crowd the country’s Central Business District sits a 71-hectare (175-acre), billion-dollar example of the city-state’s push to create alternative business hubs. Changi Business Park, dubbed the “CBD of the East” was a big draw for tech giants including International Business Machines Corp. and Advanced Micro Devices Inc. Global banks from JPMorgan Chase & Co. to Citigroup Inc. have also situated their back-end staff there.     The business park is now rapidly emptying out, dealing a blow to the Singapore government’s meticulous urban planning and efforts to get foreign businesses to expand their regional operations in the Southeast Asian island nation. Overall vacancy rates across 10 commercial properties there tracked by property consultancy Cushman & Wakefield have more than doubled in the past three years to nearly 40%.   Cushman & Wakefield The development’s woes show how global tech and finance layoffs, together with the push to work from home since the pandemic, are even overpowering a project with powerful government support in one of the world’s most desirable financial hubs. Changi’s struggles contrast with Singapore’s packed downtown, where prime office rents soared to a 15-year high earlier this year and buildings are almost full. IBM, which occupied two namesake buildings with a total of 12 floors at Changi, has reduced its presence to two floors, according to people familiar with the situation, who asked not to be identified discussing private matters. UBS Group AG has cut the more than 110,000 square feet (10,220 square meters) of space it occupied by more than half. Standard Chartered Plc, which owns two buildings in the park, has been seeking to lease out two floors with at least 58,000 square feet of office space, according to a property listing.   A "For Rent" sign on the IBM building in Changi Business Park in early June. (Photo: Aparna Nori/Bloomberg) (Photographer: Aparna Nori/Bloomberg) During a recent visit to Changi, several buildings had “For Rent” signs plastered outside their modern glass facades, including the space IBM formerly occupied, which is owned by government agency JTC Corp. Hansapoint, a seven-story development with landscaped gardens and a gym, was only 36.5% occupied at the end of 2023 following UBS’s downsizing. It was close to full previously. The Swiss bank declined to comment. Hansapoint is owned by CapitaLand Ascendas REIT, one of Singapore’s largest commercial landlords. The overall occupancy of the real estate investment trust's more than 2.3 million square feet of lettable space in the park has dropped to about 76% at end-2023, from nearly 94% four years earlier. Some of its under-performing business park units in Changi and elsewhere are being offered at a "3-for-2" rate - meaning that tenants can get one year's rent free if they sign a new three-year lease, according to people familiar with the matter and a promotional campaign online. A spokesperson for the REIT said it is in discussions with prospects for Changi Business Park, and that it employs a wide range of incentives to engage with potential clients and existing tenants. The firm’s overall business space and life sciences portfolio occupancy exceeds the industrial average in the country, the spokesperson said. Singapore remains a critical global hub for Standard Chartered, where over 80% of its staff here have adopted flexible work arrangements, a spokesman for the British lender said. The bank retains a significant presence at Changi Business Park and the downtown Marina Bay Financial Centre, he said. IBM, which also retains three floors at MBFC, said it remains committed to its local operations, and its “optimisation” of space at Changi in recent years has been shaped in part by its hybrid working model and the spinoff of its managed infrastructure services business.   An airplane flies over a Standard Chartered building in Changi Business Park. (Photo: Aparna Nori/Bloomberg( (Photographer: Aparna Nori/Bloomberg) ‘Changalore’ While the challenges faced by Singapore’s business park landlords mirror those in other parts of the world, there are also some uniquely local issues that make marketing the properties an uphill effort. Conceptualised in the early 1990s, Changi Business Park is part of a decades-long decentralisation drive by authorities, which include plans to develop a new CBD in the island’s west. The park is situated between Changi Airport – one of the world’s busiest aerodromes – and the country’s largest exhibition venue. But for Singapore white-collar workers who prefer being in the central district, the business park is still a prohibitively far-out location. A bank employee who asked not to be named said she spends at least 90 minutes commuting each way via public transport, which costs around $2. A taxi or a ride-hailing service would take less than half the time, but can cost as much as $45 during peak hours, she added.   Workers take a free campus shuttle in Changi Business Park. (Photo: Aparna Nori/Bloomberg) (Photographer: Aparna Nori/Bloomberg) To make the commute easier, companies like Standard Chartered have arranged for shuttle buses to ferry staffers from their downtown locations or subway stations to Changi. Singapore is building a new underground subway line to slash traveling times from one end of the island to the other, but it is years away from completion. Changi Business Park has also become a lightning rod for citizens’ anxieties about the city-state’s wooing of foreign labor to meet business needs. The predominance of technical operations there has led to what a minister once said was a “concentration” of Indian expatriate workers, with some locals calling the area “Chennai Business Park” or “Changalore".   Source: Bloomberg (JTC Corp) Singapore authorities have tightened immigration policies in recent years, such as by hiking minimum salary thresholds for work visa holders. That has pushed up hiring costs for businesses, making them consider basing their regional back-end staff in cheaper countries like neighbouring Malaysia. Some banks are using the threat of moving there as a negotiating tactic to get landlords to cut their rents in business spaces, according to a person familiar with discussions on rental renewals.Elsewhere, new supply is set to further challenge the market. Punggol Digital District, a 50-hectare business park developed by JTC in Singapore's northeast, will start opening in stages from later this year. One person involved in marketing Changi’s properties described the effect of the new space as killing an already dying patient. JTC said the Punggol project is an example of its efforts to keep business parks attractive. “While there appears to be increasing vacancies in older estates, we do not see this as a reflection of inherent weakness in any specific sector,” the agency said. Souring Investors Overall business park vacancies in Singapore rose to about 22% during the first quarter, the highest level in over a decade, according to government data compiled by property consultancy Colliers International Group Inc. Google parent Alphabet Inc. has given up about 60,000 square feet of space at Mapletree Business City, a business park on the fringes of the city centre. A Google spokesperson said the firm is working to ensure its real estate investments match the current and future needs of its hybrid workforce. Investor confidence has been hit. Since last year, another REIT, Mapletree Industrial Trust, has been seeking to divest three of its Singapore business park assets worth S$533 million ($396 million), including a nine-story building called The Signature in Changi, people familiar with the matter said. A spokesperson for the REIT, which is backed by state investor Temasek Holdings Pte, declined to comment. Local developer Frasers Property Ltd. recently reached a deal to sell a serviced-apartment and hotel complex in the heart of the park, which Chief Executive Officer Panote Sirivadhanabhakdi attributed partly to the “structural challenge” industrial and business parks are now facing.   Vacant space in the IBM building in Changi Business Park in May 2024. (Photo: Low De Wei/Bloomberg) (Photographer: Low De Wei/Bloomberg) To be sure, Changi recently recorded some success. Julius Baer Group Ltd. in April said it relocated close to 700 staff from Mapletree Business City to a larger space spanning over 75,000 square feet in the business park. The Swiss wealth-management firm also has an office in Singapore’s Marina Bay area. For the remaining vacant areas, the search for tenants continues. The once-occupied floors of the IBM building have fallen silent. One floor displays a dusty sign asking staff to move out by end-2022, while another still has cubicles and furniture, but no people. ©2024 Bloomberg L.P.     https://www.bloomberg.com/news/features/2024-06-05/singapore-s-changi-business-park-is-emptying-out-spurred-by-global-tech-layoffs

An aviation lawyer is questioning whether Singapore Airlines is at fault after its flight from London hit turbulence that caused a man’s death and critical injuries to many other passengers. Flight SQ321 encountered turbulence on May 21 and diverted to Bangkok. Of the 211 passengers and 18 crew on board, 23 of them were New Zealanders. 79 passengers and six crew were taken to hospital. Director of Carter Capner Law, Peter Carter, representing injured passengers on the flight, said preliminary findings released last week by the Transport Safety Investigation Bureau of Singapore raised a number of issues that point to possible fault by the airline. He said these include possible failure to take the normal precautions to avoid an obvious and large area of thunderstorms and the failure to alert passengers to fasten seat belts.   “It’s looking likely that this is not a simple case of unexpected turbulence,” Carter said. He explained that compensation is a key reason why the airline may be keeping quiet, as if the airline was not at fault, the Montréal 1999 Convention capped passenger claims at US$175,000. Inside the plane following the turbulence event on Flight SQ321. Supplied However if there was any degree of fault by an airline’s pilots or engineers there is no limit to a compensation claim. The TSIB’s preliminary report, based on initial analysis of the flight data recorder and cockpit voice recorder, stated the plane was “likely flying over an area of developing convective activity.”   Carter, who is also representing passengers on LATAM Airlines flight LA800 that plunged in March, is focusing his investigation on whether the Singapore Airlines event was associated with thunderstorms developing close to the aircraft’s flightpath. “The cockpit voice recorder will answer questions about the attention the air crew was paying to developing thunderstorms including whether they were even checking the weather radar. “Furthermore, despite a suggestion from the airline that a return to seat announcement had been made and the seatbelt sign illuminated prior to the incident, passengers we represent tell us there was no seatbelt warning at all, and that service by the flight attendants was proceeding normally.” The TSIB said before passengers were thrown into the air, “it was heard that a pilot called out that the fasten seat belt sign had been switched on.” Hot Air Sucks! Turbulence There's a type of turbulence that can’t be seen by pilots, or easily picked up by radar or satellite. It could become more prevalent.   There's a type of turbulence that can’t be seen by pilots, or easily picked up by radar or satellite. It could become more prevalent. VIDEO CREDIT: Stuff Carter said while he acknowledged the ongoing investigation, he wanted Singapore Airlines to publicly answer why the aircraft didn't divert to avoid the risk of thunderstorms and was there a discussion about doing so, how long before the incident was the weather radar monitored and the experience of the flight crew. Carter said turbulence and in-flight upsets are now the leading causes of airline cabin injuries, far exceeding the number of injuries caused by other accidents such as impact with terrain. In New Zealand, a Jetstar flight from Auckland to Dunedin had to turn back on Saturday after running into “significant turbulence”. There were no injuries. More than a third of all airline incidents in the United States from 2009 through 2018 were related to turbulence and most of them resulted in one or more serious injuries, the National Transportation Safety Board reported. NTSB figures also show that between 2009 and 2022, 163 people were injured seriously enough during turbulence events to require hospital treatment for at least two days. Research by the Department of Meteorology at the University of Reading, and the UK Meteorological Office says clear-air turbulence has increased over the past four decades with severe-or-greater clear-air turbulence becoming 55% more frequent in 2020 than 1979. A Qatar flight between Doha and Dublin was subject to turbulence and saw 12 people injured. Michael Probst / AP A Qatar Airways flight was also hit with turbulence between Doha and Dublin, resulting in 12 injuries, just a week after the Singapore Airlines flight. Carter said these events will likely lead to more compensation payouts. “Access to passenger compensation above the first-tier limit may depend on demonstrating how far the aircraft was from developing thunderstorms in an effort to show aircrew ought to have implemented a flightpath diversion,” he said. NIWA research meteorologist Richard Turner told Stuff Travel thunderstorms can be seen visually or on a plane’s weather radar system. “One of the problems with some turbulence is that they don't get much warning at all. It's clear air turbulence that they can be actually hard to detect, but a thunderstorm I would have thought that there would be some sort of visual warning, but if you're flying overhead and it's sort of developing beneath then that could be a bit tricky.” Emirates is adding turbulence detection tools to 140 aircraft with software that automatically shares turbulence reports among all airlines contributing to the International Air Transport Association’s information-sharing platform. The TSIB’s investigations are ongoing and as a result Singapore Airlines said it was unable to provide further details.     https://www.stuff.co.nz/travel/350299788/lawyer-questions-singapore-airlines-actions-during-deadly-turbulent-flight