JustCo takes over master tenancy at OG Orchard Point building with push into co-living market

[SINGAPORE] A new chapter is unfolding for OG’s Orchard Point building, with listed co-working player JustCo at the helm as master tenant after Hao Mart vacated the premises at the end of last year. 

To be renamed JustCo Place, the 10-storey building at 160 Orchard Road will be turned into an integrated hub with two floors of co-working space above a three-storey retail podium.

JustCo will also take over the management of existing serviced apartments on the upper five floors of the building, turning the 103,000 square feet (sq ft) of residential space into 123 premium co-living units. 

“It has always been our vision to do something combining ‘live, work, connect’,” JustCo CEO Kong Wan Sing told media. “This project is our proof of concept…that we can make it work.”

The two floors of co-working space, spanning 64,000 sq ft over the third and fourth levels, have been fully leased to consultancy firm Deloitte.  

JustCo is now in negotiations with prospective tenants for the 87,000 sq ft of retail space across the basement to the second floor, while the fifth floor will serve as a rooftop terrace for the co-working centre.

Kong said that mainboard-listed JustCo had been in discussions with landlord OG since the previous master tenant, Hao Mart, vacated the premises last year.

OG terminated the supermarket operator’s lease last September, less than two years after Taste Orchard opened. It later sued Hao Mart for allegedly failing to pay S$9.2 million in rent and subletting parts of the premises without approval. 

JustCo’s discussions ultimately led the landlord to invest “tens of millions” to retrofit the building around the “live, work, connect” concept, to “bring new life not just to this building, but also to Orchard Road”, Kong said.

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The revamp includes renovating its facade and transforming the existing 88 serviced apartments into 123 “premium co-living apartments”. 

On its part, JustCo invested “millions” on fitting out and refurbishing the building’s retail and co-working spaces, Kong said. 

The 64,000 sq ft workspace, which opens in September, can accommodate up to 1,300 people. Deloitte has committed to fully occupy the space. Kong declined to share Deloitte’s lease terms, but said the average lease with JustCo is about 15 months with built-in renewal options.

The multinational currently occupies 150,000 sq ft across four floors at OUE Downtown in Shenton Way.

The Business Times understands Deloitte has plans to move to a new permanent flagship location in the future. In 2023, Deloitte said it would add around 3,000 new hires in Singapore within five years as part of growth plans across the region.

A Deloitte spokesperson told BT that “a portion” of its employees will relocate to JustCo Place from OUE Downtown, which it has occupied since 2002, as part of its “ongoing workplace growth strategy”. 

“This move…reflects our continued investment in creating workplace experiences that support how our people work, collaborate and serve clients,” the spokesperson said. “A key thrust of our strategy is to make our workplace future-proof and fit for purpose.”

Deloitte declined to elaborate on how many employees would relocate to JustCo Place, as well as future occupancy plans at this stage. 

According to Kong, demand for flexible workspaces did not typically come from companies with more than 1,000 employees, such as Deloitte, since most would prefer customised office space. 

“If (they have) less than 100 or less than 500 employees, then yes, I do see (that) more are coming in,” he said. “So I would say that Deloitte’s management is quite forward-thinking.” 

At JustCo Place, the retail mix will include F&B, lifestyle, wellness and healthcare tenants. 

JustCo is already in talks with “quite a number” of prospective retailers. 

Kong described the response from retailers as “overwhelming”, citing the group’s track record of generating footfall through its network of co-working centres at shopping malls including The Centrepoint and Marina Square.

New frontiers

On Friday (Jul 10), JustCo also unveiled JustAt, a new co-living brand that will debut at JustCo Place and operate from January 2027. 

Occupying the sixth to 10th floors, the 123 serviced apartments can accommodate up to 475 guests. Units are sized between 200 sq ft for a studio and 900 sq ft for a three-bedder. Most apartments will be one-bedders of 400 to 500 sq ft.

In a preliminary prospectus issued ahead of its May listing, JustCo said its entry into the co-living sector will create adjacent revenue streams and target the same customer base as its core business of co-working. 

“(This will allow) us to capture operational synergies, create additional customer touchpoints and cross-sell integrated services apartments and flexible workspace offerings,” it said. 

Kong said the group had yet to set JustAt’s prices, but “it’s not going to be like Four Seasons and also not like hostel pricing”. 

While JustCo Place’s co-living and retail components mark new ground for the group, Kong expressed confidence in the project, pointing to its low-risk structure. 

“The serviced apartments (have) the most minimum risk you can ever undertake for a project,” he said. “It’s a pure management contract…and it’s in Orchard Road. How can this not sell in Orchard Road?”

At the same time, Kong noted that the retail component is “very small”, lowering leasing risks. 

“We are receiving overwhelming response (from retailers) because people see this plan, how we’re going to rejuvenate it, and also… there’s footfall coming in (from) Deloitte, people who can pay,” he said. 

Asked about the internal rate of return (IRR) needed to make JustCo Place work, Kong said the group typically assessed investments based on both the IRR and payback period. He expects the Orchard project to achieve payback within two to three years, which he said translates to an IRR of “20-odd per cent, plus or minus”.

JustCo plans to replicate its “live, work, connect” model elsewhere in Singapore and in other markets where it has a presence. Besides Singapore, the group operates in Thailand, Vietnam, Taiwan, South Korea, Japan, India, Malaysia and Australia.  

He said JustCo was already in discussions with several interested building owners on similar projects. 

“People are all eagerly waiting to see (JustCo Place’s) launch,” he said with a smile. “If there is an opportunity to work on this project in other parts of Singapore or overseas, we are very open to do it.” 

But he noted that the group is likely to develop just one or two of such projects in each city, depending on its size.