Prime office rents fall 19% in Q2

Source : Business Times – 7 Jul 2009

DTZ notes decline rate eased slightly after Q1’s plunge

OFFICE rents in Raffles Place fell 19 per cent in the second quarter of this year, after sinking 25 per cent in Q1, according to a new report from DTZ.

The average monthly gross rent for prime office space in Raffles Place slipped to $9.70 per sq ft per month (psf pm) in Q2. The figure has now fallen close to the level at end-2006 – and is 49 per cent below the Q3 2008 peak.

However, DTZ notes that the rate of decline eased slightly in Q2 2009, after a deep plunge in Q1.

Research from CB Richard Ellis (CBRE) shows the same trend. Prime office rents averaged $8.60 psf pm in Q2 – an 18.2 per cent quarter-on-quarter fall. This was a slight moderation from the 18.6 per cent drop in Q1.

‘While office rents fell for the third consecutive quarter, the rate of decline showed signs of easing as sentiment improved and the economy stabilised,’ CBRE said.

But DTZ says that office rents on the CBD fringe and in decentralised areas fell faster in Q2 than in Q1. The firm’s data shows rents in Beach Road/North Bridge Road slid 20 per cent to $6.20 psf pm in Q2, after a 13 per cent fall in Q1.

Along the Alexandra belt, competition from converted state property and hi-tech industrial property also led to a bigger decline in office rents in Q2 than in Q1. Rents there fell 23 per cent to $5 psf pm, after dropping 13 per cent in Q1.

With CBD office rents falling, the rental gap between office space in the CBD and outside it has narrowed.

In Q2, office rents in Marina Centre were 12 per cent lower than those for prime offices in Raffles Place, compared with an 18 per cent gap during the peak in Q3 2008.

In the Harbourfront area, the gap closed even more – from 47 per cent in Q3 2008 to 35 per cent in Q2 2009. As the gap in rents between CBD and CBD fringe narrows, some companies driven to relocate outside the CBD during the boom years are likely to return, DTZ reckons.

Occupancies were hit further in Q2, although at a slower rate than in Q1. DTZ says the island-wide average office occupancy rate eased 0.9 of a percentage point to 92.8 per cent, lower than the 1.9 percentage point contraction in Q1. Average occupancy in Raffles Place fell 1.1 percentage points to 91.8 per cent in Q2, lower than the 2.7 per cent drop in Q1. Among the micro markets, offices in Orchard Road saw the biggest drop in occupancy. The rate slid 2.8 percentage points to 91.5 per cent as more shadow space became available there.

But CBRE and DTZ say leasing enquiries are starting to pick up. ‘It is likely to be a busy H2 for the office leasing market,’ said CBRE’s executive director for office services Moray Armstrong.

‘New lease transaction volumes will be higher, but the focus is likely to remain on lower-cost and better-value options. The best occupier deals may well emerge in the next six to 12 months before market recovery is at hand.’

But take-up is likely to remain in negative territory for the rest of 2009 and occupancies are expected to dip further, according to CBRE and DTZ. The office market is expected to stay soft until 2011, says Chua Chor Hoon, head of DTZ’s Southeast Asia research.

‘A large supply of space overhangs the office market over the next few years, which will delay the recovery of the sector even though the economy is expected to recover by 2010,’ she said.

Moving back to the CBD?

Source : Today – 7 Jul 2009

LOWER occupancy rates and cheaper rents in office buildings around the central business district (CBD) may prompt some firms to move back into the city, property experts said.

In the second quarter, office rentals declined to less than $10 per square foot (psf) per month compared with a whopping $19 psf a month a year ago.

“Companies are beginning to re-look opportunities to go back to the CBD as rents are a lot more affordable than 2007,” said Ms Cheng Siow Ying, DTZ Debenhem Tie Leung executive director of business space. “Some offices which are already fitted out make the sums look good,” she told Today.

DTZ said in a release that “as the gap in rental values between the CBD and CBD fringe office space narrows, some companies, particularly those driven to relocate outside the CBD during the boom times in 2006-2007, are likely to return”.

DTZ added that monthly rents in Raffles Place, the heart of the CBD, fell 19 per cent quarter on quarter to $9.70 psf, close to the levels recorded at the end of 2006.

During the property market boom in 2007, many firms moved out of the CBD area to cheaper locations. For instance, banking group HSBC moved some of its operations to The Comtech, a building in Alexandra.

Meanwhile, property consultant Nicholas Mak believes that among the firms that will likely make a return to the CBD area are “small companies with less than 40 staff, as they are nimble enough to do so without having to take up two floors or more.”

“What we’re seeing now is a flight to quality,” said Mr Mak. “Generally, six months before the lease expires, people will be looking around and checking to see if it’s worthwhile to move. They’ve got to consider relocation and renovation costs, and it must make sense to stay there for at least two cycles, or six years. Moving again after three years doesn’t make sense.”

At the same time, property consultants have also reported increased enquiries about office leasing islandwide in the second quarter compared with the first. There has also been intense competition between landlords engaged in lease restructuring, too, they added.

In a separate report, property consulting firm CB Richard Ellis said Grade A office vacancy rose 3.6 per cent in the second quarter, up from 2.9 per cent in the previous quarter.

Still, property consultants expect the office rental market to remain soft as vacancies are expected to rise when developments including Marina Bay Financial Centre, 71 Robinson Road and 50 Collyer Quay are completed.

Slide in office, industrial rents continues in Q2

Source : Straits Times – 7 Jul 2009

LANDLORDS took a one-two punch in the second quarter, with rents continuing to decline for offices and industrial space as vacancies kept rising.

Rents were under the most pressure in the city-fringe and high-tech sites while more space was vacated, particularly in the core Central Business District (CBD) area.

Consultants DTZ said office rents in Beach Road and North Bridge Road fell 20 per cent to $6.20 per sq ft (psf) per month in the second quarter. This followed a 13 per cent fall in the first quarter.

Rents along the Alexandra Road belt fell 23 per cent to $5 psf a month in the April to June period, compounding a 13 per cent drop in the first quarter.

The decline was driven mainly by competition from a converted state property and high-tech industrial sites in the area.

Generally, rents in the office market have been falling as demand weakens in the face of rising supply. The amount of grade A space, in particular, will double in the next five years.

CBRE said monthly prime office rents fell about 18 per cent to $8.60 psf in the second quarter, after a 18.6 per cent quarter-on-quarter drop in the first quarter.

Grade A office rents are down 17.5 per cent to $10.l5 psf a month. They also fell 18 per cent in the first quarter.

DTZ said Raffles Place office rents are now close to the levels at the end of 2006 and are 49 per cent below the peak in the third quarter last year.

The rental gap between office space in the CBD and that elsewhere has narrowed. Offices in Marina Centre are now 12 per cent cheaper to rent than those of prime space in Raffles Place, compared with a rental gap of 18 per cent at the peak of the market. The gap has closed even more in the Harbourfront area – from 47 per cent at the peak to 35 per cent in the second quarter.

Some firms, particularly those driven to relocate outside the CBD during the 2006-2007 boom, are now likely to return, said DTZ.

Office leasing activity continues to be driven mainly by lease renewals as firms downsize. Take-up has been negative for the past two quarters and is likely to remain so for the rest of the year, said CBRE’s executive director (office services), Mr Moray Armstrong.

‘We are seeing greater incentives including, for instance, capital expenditure contributions to attract or retain quality tenants,’ he said.

The good news is that the rate of rental decline will ease from the dramatic falls seen since last September but demand will still be ’severely constrained’.

Vacancy rates across the island are tipped to be in the double digits in the next few years and leasing deals will stay highly competitive, added Mr Armstrong.

Still, office capital values held firm in the second quarter as improved buying sentiment in the residential sector spread to other sectors, DTZ said.

In the industrial market, the high-tech space segment – this includes business park space that caters to both markets – continued to be the hardest hit and is forecast to remain under pressure, it said.

High-tech industrial rent fell 12.8 per cent – the most in six years – to $3.40 psf in the second quarter. It is down 24.4 per cent from the peak of $4.50 psf in the third quarter last year, said DTZ.

First-storey industrial space slid 6.8 per cent to $2.05 psf a month.

Ms Chua Chor Hoon, DTZ’s head of South-east Asia research, said ample supply will keep the office and industrial markets soft until 2011.

New business park space looms over CBD

Source : Business Times - 2 Oct 2008

New supply over next 5 years projected at about 7.8m sq ft: CBRE

WITH the Singapore market still digesting the fact that there is about 10.2 million sq ft of office space in the pipeline, news that there is also substantial business park space coming is not likely to go down well.

According to CB Richard Ellis, projected new supply of business park space over the next five years is about 7.8 million sq ft. This includes developments like The Icon@International Business Park, Solaris, Mapletree Business City, and Centric Singapore.

CBRE also believes 67 per cent of this has already been pre-let.

By comparison, only about 25 per cent of future office supply is thought to be pre-let.

While certain conditions apply before anyone can move into a business park space, it has become increasingly clear that businesses themselves have no qualms about moving to the outskirts of the city. Already, Changi Business Park has attracted MNCs like Citigroup, Standard Chartered Bank and Credit Suisse.

CBRE executive director (office services) Moray Armstrong added that many new leases in business parks ‘are in motion’, boosted by the availability of quality business parks.

‘The business parks have evidently been the sweet spot for many occupiers over the past 12 months,’ he added.

And business parks, which Mr Moray describes as a ‘hybrid’ of traditional office space and high-tech industrial space, is set to evolve even more.

While Changi Business Park is characterised by individual developable land plots available for end users or developers to construct build-to-suit corporate buildings, Mr Armstrong reveals that the upcoming 1.7 million sq ft Mapletree Business City in the Alexandra vicinity will be a more office-like integrated precinct including retail space under single ownership. It is also just minutes from the CBD.

And the concept is proving to be popular as over 400,000 sq ft of pre-lease deals have already been done ahead of completion in H2 2010.

Demand for business park space is likely to grow at the expense of standard office space. Business park rents, at an average $3.15 psf per month in Q2 2008, are considerably lower than average prime rents of $16.10 psf per month.

But while Mr Armstrong believes that business parks will certainly compete to an extent and will slightly dilute overall office demand, he said: ‘Nonetheless, we do not expect this to impact the office sector significantly.’

He added: ‘There is far less speculative business park development as a rule. Most projects that are being built are pre-let or built-to-suit.’

According to CBRE’s analysis, Grade A office space vacancy remained tight in Q2 ‘08 at 0.6 per cent. However, vacancy rates for the CBD fringe rose significantly from 4.6 to 7 per cent.

For the same period, vacancy rates for decentralised areas dipped to 1.6 per cent from 3 per cent. CBRE noted there was ‘heightened interest’ in the Alexandra/Harbourfront micromarket.

Interestingly, new supply could also have a diluting effect on the business park space segment as well. JTC’s Q2 ‘08 quarterly facilities report reveals that its occupancy level for its business park space declined marginally by 0.4 percentage points quarter-on-quarter to 94.3 per cent. This was partly attributed to new supply from Fusionopolis which saw gross allocation of about 450,000 sq ft of space.

UBS Investment Research estimates that financial firms occupy 20 per cent of CBD offices and 30-50 per cent of the prime buildings within it.

UBS does not expect major job losses here from the fallout of the US financial crisis. Losses, if any, will only occur in 2009. Still, it said that if even between 1.5-6 per cent of the estimated 156,900 financial sector jobs are lost, it could equate to a drop in demand in office space of between 243,000 and 971,000 sq ft.

Office rents in Singapore showing signs of peaking

Source : Channel NewsAsia - 16 Jul 2008

Office rents in Singapore are starting to show signs of peaking, said property analysts.

They noted that prime rental costs have generally increased at a far slower pace in the first half of this year, compared to 2007.

Looking ahead, they expect office rents to soften even more towards the end of 2009 and early 2010 as demand for prime space eases.

Donald Han, managing director of Cushman & Wakefield, said: “The market is quite close to the peak, by virtue that we have seen the bulk of the expansion process by users, multinationals.”

Chua Chor Hoon, senior director of research, DTZ, said: “Rentals went up quite a lot last year – almost doubled. So there is a lot of resistance to that high level of rental, plus there is more cautiousness in the market now because of what’s happening in US and its impact on Singapore.”

Last year, Grade A office rents rose 96.5 per cent, compared to just 9.6 per cent in the first half this year.

Consultants said they expect to see more softness as some one million square feet of space may be released once major occupants complete their plans to move out.

“For banks like Standard Chartered, DBS and Citibank, you’ll probably see completion of these three portfolios in Changi Business Park in end 2009 and early 2010,” said Mr Han.

In addition, about 6.7 million square feet of space will come on-stream by 2011 and more than 60 per cent of it will be Grade A space.

While rentals for prime office space may be peaking, those for fringe locations have been increasing at a faster pace.

Ms Chua said: “The interesting thing we noticed is that for office outside the CBD, like the Harbourfront, Novena, Alexandra or Tampines, we see strong demand over there. Rental growth is slightly higher than in CBD.”

In the second quarter, rental growth for these decentralised areas was about 3 to 5 per cent.

CBD offices still available at $6-9 psf a month

Source : Business Times - 8 Jul 2008

Small pockets of space can be found in older buildings in the central district

THE average Grade A office monthly rental in Singapore touched $18.80 psf in Q2, while the vacancy rate for such premium space stands at a mere 0.6 per cent.

However, small pockets of space ranging from a few hundred square feet to 3,000 sq ft are still available in older buildings in the Central Business District. For example, at Cecil Street, Shenton Way and Tanjong Pagar, monthly rents range from $6 psf to $9 psf.

At International Plaza next to Tanjong Pagar MRT Station, a 400 sq ft unit without a window is going for a monthly rental of $6 psf, while a 1,500 sq ft unit on a higher floor has a $9 psf rental tag.

Over at Octagon along Cecil Street, two units (of 1,300 sq ft and 2,000 sq ft) are being offered at $7.80 psf.

At 146 Robinson Road, tenants are being sought for a few units of between 1,000 and 3,000 sq ft on various floors with an asking rental of $7.50 psf.

At Shenton House, asking rentals for units on the seventh and 25th floors are said to be in the $6.50 to $7.00 psf range.

‘While there are many office buildings asking for double-digit monthly rents, users can still find office units at single-digit rents on the fringe of Raffles Place, such as Robinson Road and Cecil Street.

‘These buildings are mainly older and have smaller floor plates. In addition, they are mostly sandwiched between other buildings and offer very limited or no car park lots in the building,’ says Knight Frank director, business space (office) Agnes Tay.

‘We would expect smaller companies providing professional services and non-financial companies to find such options attractive in terms of rental levels and at the same time without compromising on the convenience of location. These tenants could be in fields like auditing, accounting, consultancy, legal services, design, shipping and IT,’ she added.

Tenants willing to pay slightly higher rents but still shy of Grade A rates also have several options in the CBD.

At UIC Building on Shenton Way, owner United Industrial Corporation has put on hold its development plans for the property and is said to have for leasing a total 43,000 sq ft comprising units of various sizes from 700 sq ft to 9,000 sq ft.

The asking rental is said to be about $11 psf. UIC is said to be offering tenants leases of three years but without options for renewal.

In more prime buildings such as the Arcade near Raffles Place MRT Station and 8 Shenton Way (formerly Temasek Tower), asking rents are higher, around $10.50-14.50 psf and $12-14 psf respectively, BT understands.

Bigger office spaces in the CBD are also becoming available, partly due to the government’s initiative to move its agencies out of the CBD to ease the acute shortage of prime offices.

Singapore Land Authority will be giving up seven floors or 92,569 sq ft at 8 Shenton Way when it moves to Revenue House in Novena in Q4 this year.

InfoComm Development Authority is also expected to give up some space at Suntec City by the year-end.

Swiss banking group UBS is also believed to be giving up about 47,000 sq ft of space it no longer needs on the 10th and 15th floors of Suntec City Tower.

The space may be available for lease as early as September, BT understands.

A UBS spokeswoman said: ‘We are giving up some space at Suntec City because we’ve achieved more efficient space usage. But even after releasing this area, we’ll still continue to occupy some 200,000 sq ft at Suntec City alone. In addition, since last year we’ve leased 230,000 sq ft at One Raffles Quay. So we would still have grown our Singapore footprint from 250,000 sq ft in 2006 to 450,000 sq ft.’

Industry observers are keeping their eye on other big office occupiers to see if they, too, would release excess space.

DTZ noted last week that the government’s efforts to create more immediate office space - such as releasing transitional office sites and awarding disused state properties to the private sector for conversion to offices - has helped to ease the supply crunch and pressure on rentals.

This CBD office shortage will be eased from 2010 as new office projects are completed.

‘Going forward, as companies and government agencies start to move out of the CBD and more new supply comes onstream, office occupancy is likely to ease and limit rental growth in the CBD for the rest of 2008,’ DTZ said.

Buyers bidding up prices of shophouses

Source : Straits Times - 22 Jun 2008

While sales have slumped this year after a strong run, units costing over $5m are attracting strong demand

SHOPHOUSES have been a popular choice for investors, as well as occupiers who sought to avoid the hefty office- rent increases that were so rampant last year.

But after a spectacular year, shophouse sales have sunk this year due to the cautious mood in the property market.

Shophouses near or inside the CBD, such as these units in Chinatown, are highly sought-after as they are often close to MRT stations, say consultants. — ST FILE PHOTO

Nevertheless, new figures released by CBRE Research show that more buyers are snapping up shophouses that cost more than $5 million each.

So far this year, $98.58 million worth of properties have changed hands, compared with just above $1 billion worth for the whole of last year.

And since January, deals for shophouses worth more than $5 million each have reached 86 per cent of total sales, or $83.75 million, compared with 64 per cent of total sales or $694 million last year.

‘Investors and business owners still see shophouse units as an alternative to alleviate the current supply crunch in the office market,’ said CBRE Research’s executive director, Mr Li Hiaw Ho.

In the past two years, demand for shophouses has shot up, raising the value of such properties, he said.

For instance, in January this year, a European fund paid $6.88 million for four shophouses in Club Street.

The seller had bought them for $3.6 million in May last year.

But not all sellers can make such gains. A lot still depends on location.

Popular with smaller set-ups

Shophouses located near or within the Central Business District (CBD) are highly sought-after as they are usually located near MRT stations, said CBRE Research.

Last month, a fairly small 1,171 sq ft shophouse in Boat Quay was sold for a hefty $5.25 million. Earlier this month, a 1,455 sq ft shophouse in Bukit Pasoh Road went for $6.2 million.

There are cheaper options.

In Tanjong Katong Road, a few shophouses spread over 8,697 sq ft were sold for $8.2 million in March, according to CBRE data.

These same units were previously transacted in July last year for $7.72 million.

‘Shophouses tend to attract smaller set-ups, mainly because the shophouses are usually small,’ said Mr Li.

‘Some hedge funds and investment-related companies also find the units unique, similar to the townhouses which you can find in London,’ he added.

Tenants for shophouses in prime locations, such as Amoy Street and Telok Ayer Street, are mostly hedge funds, law firms, architectural firms, interior designing firms and art design schools such as Sotheby’s Art School, said CBRE Research.

Attractive rental yields

Rental yields for shophouses typically range from 4 to 6 per cent, above the usual residential ones of 3 to 4 per cent, said Colliers International’s deputy managing director for agency & business services, Ms Grace Ng.

For owner-occupiers, shophouses may make good investments as they could be paying less in mortgage payments every month compared to monthly rent in a prime office building, property consultants said.

Still, asking rents for shophouses in prime locations have jumped by at least 40 per cent or more in the past year, said Mr Li.

Current rates in the CBD such as Telok Ayer Street are as high as $8 per sq ft (psf) to $8.50 psf a month, up from $5 psf to $6 psf a month a year ago.

This compares with current average rents of around $16 psf for prime office building space.

‘Even with rising values and rents, shophouses are still attractive to tenants because of the current office supply crunch,’ said Mr Li.

For investors, shophouses may prove to be a better investment than a strata office unit, which gives a typical yield of 4 to 4.5 per cent, he said.

Colliers International is marketing a two-storey corner shophouse in Peck Seah Street, off Tanjong Pagar Road, at an indicative price of $6.1 million. At this price, the buyer of the tenanted property will get a rental yield of 5 per cent.

CBRE is selling a four-storey shophouse in Tanjong Pagar Road. The two existing tenants are paying rents of between $3 psf and $4 psf a month, which give a rental yield of 3.5 per cent.

But the leases will end next year, it said. Whoever buys the property - the asking price is $9 million - can ask for rents of at least $5 or $6 psf, which would give a yield of around 5 per cent.

GOOD INVESTMENT

# For owner-occupiers, shophouses may make good investments, as they could be paying less in mortgage payments every month compared to monthly rent in a prime office building,

# Rental yields, ranging typically from 4 to 6 per cent, are often higher than for residential and office units, say property consultants.

Transforming Singapore

Source : Business Times - 29 May 2008

Regardless of the market sentiment, the three “L’s” - Location, Location, Location - will always remain fundamental to the property sector. As such, it pays to know where the best real estate locations are likely to be.

And with the Draft Master Plan 2008 having outlined new key growth areas, hot spots and hubs, there is no guesswork required.

Singapore Master Plan: New vision for Kallang Riverside

Singapore Master Plan: Creating more buzz in the Central Area

Singapore Master Plan: Paya Lebar Master Plan is long overdue

Singapore Master Plan: Plans to improve urban spaces

Singapore Master Plan: Achievements of the past 10 years

Singapore Master Plan: Creating more buzz in the Central Area

By LEONARD TAY, director of CBRE Research

Source : Business Times - 29 May 2008

OF ALL the changes made in the recent announcement of the new draft Master Plan 2008, those being effected within the Central Region in general and within the Central Area in particular would have the most telling impact on commercial land use in Singapore.

Marina Bay Financial Centre: About 44 per cent of the supply of new office space in Singapore will be in the new commercial area of Marina Bay, and would be of Grade A quality

The Central Area lies at the heart of the Central Region and includes the sub-zones of the Downtown Core, Singapore River, River Valley, Outram, Museum, Rochor, Newton and Orchard, as well as new areas for development comprising the sub-zones Marina East, Marina South and Straits View.

In the years since the last Master Plan in 2003, the Central Area has been evolving from a land use that was predominantly commercial to include a wider diversity of other uses, such as residential, lifestyle/entertainment and recreation. Yet, despite the influx of uses that were not typical to the Central Area 10 years ago, it is the commercial elements (especially the office sector) within the Central Area that look poised to grow in terms of both quality and quantity.

The confirmed supply of new office space in Singapore in the next five years is estimated to be about 10.2 million square feet and about 44 per cent of these new office buildings (Marina Bay Financial Centre, Marina View North Tower and Marina View South Tower) would be in the new commercial area of Marina Bay, and would be of Grade A quality.

In addition, 64 per cent of the future office supply islandwide would be Grade A buildings, undoubtedly raising the quality of office stock in the Core CBD, thereby contributing to the attractiveness of the city-state as a major financial centre.

At the same time, the Draft Master Plan 2008 provides the quantity of development space, as an additional 6.4 million sq m (69 million sq ft) of commercial space is planned for the Central Area in 10-15 years.

Rail network

A glance at the sites from the Draft Master Plan in the Marina Bay area shows that almost all the sites are ‘white’ sites, where mixed-used developments can be constructed.

Moreover, the plot ratios of the undeveloped sites range from 8.0 to 25.0, with most of the sites having a plot ratio of 13.0. These would mostly comprise modern office buildings, while at the same time suggesting that Marina Bay would have a diversity of uses that should see complementary retail space as well as residential homes. Therefore, offices with large floorplates, homes overlooking the 101-hectare Gardens by the Bay, or shops within walking distance of the entertainment highlights at the soon-to-be-completed integrated resort look set to transform Marina Bay.

In anticipation of these exciting changes, the government is also investing in significant infrastructure. In the LTA’s Land Transport Masterplan, the rail transit network would increase from the present 138 km to 278 km by 2020.

Not only will this make the rail network comparable to those in cities like New York and London, it would facilitate the injection of even more activity into the Central Area. It is envisaged that commuters would have access to a rail transit station within 400 metres, or five minutes’ walk, from any location in the Central Area, bringing people to an array of activities in the new downtown.

Not all the action will be in Marina Bay though as the Tanjong Pagar area south of the existing CBD will also be rejuvenated, and the Beach Road/Ophir-Rochor Corridor will house a number of varied mixed-use developments. The development of these areas would provide another tier of commercial facilities on the fringe of the CBD, supporting businesses that do not require a Core CBD location.

Singapore Master Plan: Creating more buzz in the Central Area

By LEONARD TAY, director of CBRE Research Source : Business Times - 29 May 2008

OF ALL the changes made in the recent announcement of the new draft Master Plan 2008, those being effected within the Central Region in general and within the Central Area in particular would have the most telling impact on commercial land use in Singapore.
Marina Bay Financial Centre: About 44 per cent of the supply of new office space in Singapore will be in the new commercial area of Marina Bay, and would be of Grade A quality
The Central Area lies at the heart of the Central Region and includes the sub-zones of the Downtown Core, Singapore River, River Valley, Outram, Museum, Rochor, Newton and Orchard, as well as new areas for development comprising the sub-zones Marina East, Marina South and Straits View.
In the years since the last Master Plan in 2003, the Central Area has been evolving from a land use that was predominantly commercial to include a wider diversity of other uses, such as residential, lifestyle/entertainment and recreation. Yet, despite the influx of uses that were not typical to the Central Area 10 years ago, it is the commercial elements (especially the office sector) within the Central Area that look poised to grow in terms of both quality and quantity.
The confirmed supply of new office space in Singapore in the next five years is estimated to be about 10.2 million square feet and about 44 per cent of these new office buildings (Marina Bay Financial Centre, Marina View North Tower and Marina View South Tower) would be in the new commercial area of Marina Bay, and would be of Grade A quality.
In addition, 64 per cent of the future office supply islandwide would be Grade A buildings, undoubtedly raising the quality of office stock in the Core CBD, thereby contributing to the attractiveness of the city-state as a major financial centre.
At the same time, the Draft Master Plan 2008 provides the quantity of development space, as an additional 6.4 million sq m (69 million sq ft) of commercial space is planned for the Central Area in 10-15 years.
Rail network
A glance at the sites from the Draft Master Plan in the Marina Bay area shows that almost all the sites are ‘white’ sites, where mixed-used developments can be constructed.
Moreover, the plot ratios of the undeveloped sites range from 8.0 to 25.0, with most of the sites having a plot ratio of 13.0. These would mostly comprise modern office buildings, while at the same time suggesting that Marina Bay would have a diversity of uses that should see complementary retail space as well as residential homes. Therefore, offices with large floorplates, homes overlooking the 101-hectare Gardens by the Bay, or shops within walking distance of the entertainment highlights at the soon-to-be-completed integrated resort look set to transform Marina Bay.
In anticipation of these exciting changes, the government is also investing in significant infrastructure. In the LTA’s Land Transport Masterplan, the rail transit network would increase from the present 138 km to 278 km by 2020.
Not only will this make the rail network comparable to those in cities like New York and London, it would facilitate the injection of even more activity into the Central Area. It is envisaged that commuters would have access to a rail transit station within 400 metres, or five minutes’ walk, from any location in the Central Area, bringing people to an array of activities in the new downtown.
Not all the action will be in Marina Bay though as the Tanjong Pagar area south of the existing CBD will also be rejuvenated, and the Beach Road/Ophir-Rochor Corridor will house a number of varied mixed-use developments. The development of these areas would provide another tier of commercial facilities on the fringe of the CBD, supporting businesses that do not require a Core CBD location.

More space, more buzz in expanded city centre

Source : Straits Times - 24 May 2008

Size will double with 23,000 new homes; wider lifestyle, leisure and business options

THE heart and soul of Singapore is about to get bigger - and you might get to live closer to it.

The city centre is set for an injection of 23,000 new homes in the next decade, as the Central Business District (CBD) doubles in size to dwarf even that of London’s famed Canary Wharf financial district.

In particular, Tanjong Pagar has been identified for rejuvenation, which will see new hotels, and commercial and residential sites being developed as the district becomes the ‘Southern Gateway’ to the city centre.

Plans for a bigger, bolder city centre - which will offer more lifestyle, business and leisure options - were released by Singapore’s urban planners under the latest draft Masterplan 2008 yesterday.

Marina Bay will remain the mainstay of supply for Singapore’s growing demand for office space. At 129ha and offering 2.82 millionsqm of office space, it will be the equivalent of Hong Kong Central, the city’s main business district, said the Urban Redevelopment Authority (URA).

While Marina Bay and the city centre will be the key commercial districts to meet demand, new ‘commercial nodes’ outside the CBD will offer attractive alternatives to businesses, said National Development Minister Mah Bow Tan yesterday at the launch.

This includes the Beach Road/Ophir-Rochor district, which will undergo a makeover previously announced by URA to become the ‘Northern Gateway’ to the city. Already under way is the development of the eco-friendly South Beach project designed by world-renowned British architect Norman Foster and his partners.

The development includes two towers of up to 45 storeys high, linked to the conserved military buildings of the old Beach Road camp. There will also be premium office space, two luxury hotels offering up to 700 rooms, service apartments and shops on the 3.5ha site.

In Tanjong Pagar, several sites have been sold in the past year for the development of new offices, hotel rooms and high-rise residential projects such as Pinnacle@Duxton and the Icon.

All this and more will further enhance the vibrancy and activities of the Tanjong Pagar commercial district, said URA.

In the broader central region, another 130,900 homes have also been planned, adding to the existing 335,400 units in the area.

These include new abodes in established towns Queenstown, Toa Payoh and Kallang. The proliferation of homes located close to commercial centres is also part of the strategy to ‘reduce commuting by bringing jobs closer to home’, said Mr Mah.

Public infrastructure, especially in transport, will be enhanced in the area, with the new Downtown and Thomson MRT lines and the Marina Coastal Expressway serving the expanded city centre.

Mr Danny Yeo, deputy managing director of property consultancy Knight Frank, said the latest plans will help alleviate some of the city’s traffic problems.

‘The increased residential component will also inject a lot more nightlife, and bring people closer to towns, reducing the need for travelling,’ said Mr Yeo.

Waterfront cluster with high-end appeal

Source : Straits Times - 20 May 2008

New Fullerton Heritage zone has luxury retail and dining outlets to draw the well-heeled

RAFFLES Place may be best known as the arena where high-flying bankers and corporate executives slog away for handsome salaries. But a small patch of it is set to become a luxury retail haven where they can spend their hard-earned cash on art, jewellery and fine dining.

The waterfront strip around the historic Collyer Quay is being transformed into a playground for well-heeled locals and tourists, as developers of the Fullerton Heritage zone seek to lure these big spenders away from Orchard Road.

Features range from a luxury retail cluster in The Fullerton Hotel to a classy Chinese restaurant and bar in Clifford Pier by Hong Kong’s trendy Aqua restaurant group.

The overriding strategy is clearly to pull in the well-to-do who might normally shop and dine in and around Orchard Road, the country’s main shopping belt.

The Fullerton Heritage’s general manager, Ms Sulian Tan-Wijaya, said the waterfront destination will ‘create a new luxury retail cluster that currently does not exist in the Raffles Place area’.

Its expected clientele will include business and leisure travellers, executives from the Central Business District (CBD) and new Marina Bay Financial Centre, casino patrons and residents from upcoming condominiums nearby like The Sail and Marina Bay Residences.

The retail element will be concentrated at The Fullerton Hotel, where under-utilised conference rooms have been converted into more than 5,000 sq ft of space for five shops.

The retailers include London-based Singapore fashion designer Ashley Isham; jewellers Mouawad, Vois and Raffles Jeweller; and a high-end Chinese and Asian contemporary art gallery called I Preciation.

I Preciation has been operating since 2003, while the remaining four will open by July - in time to cash in on the Formula One Grand Prix that is expected to draw 240,000 spectators in September.

Ms Tan-Wijaya is confident that the outlets will enjoy ‘a steady stream of business’ despite the hefty price tags, as 80 per cent of The Fullerton Hotel’s guests are corporate clients.

Brisk sales at I Preciation, where art works go for anything between $10,000 and $4 million, back up her view.

The majority of its clients are executives, high-net worth individuals and keen collectors who work in the CBD, said Mr C.T. Lim, one of the gallery’s two owners.

Raffles Jeweller director Margaret Lau said she was lured to The Fullerton Hotel from Orchard Road, where she has been operating for the last 15 years.

She said the hotel’s rent is not lower than that in Orchard Road, but she looks forward to ‘the prospect of opening up the business to an international corporate clientele’.

She is also confident that her regular clients will make the trip to this newly designated ‘destination shopping’ zone to buy her bling.

The Fullerton Heritage refers to a string of buildings and land opposite Marina Bay owned by Hong Kong-based Sino Land, the sister company of Singapore property giant Far East Organization.

They include existing buildings One Fullerton, The Fullerton Hotel, The Fullerton Waterboat House, Clifford Pier and Customs House.

Sino Land, which is controlled by the family of property magnate Ng Teng Fong, won the tender for the Collyer Quay corridor in December 2006 with a bid of $165.8 million.

Its ambitious plan to revamp the existing buildings while preserving the area’s distinctive architecture is part of larger plans to rejuvenate the Marina Bay area by 2010.

It is also building a luxury boutique hotel called The Fullerton Bay Hotel, which will have 98 rooms with water views, on the site.

Appetites will be catered for with One Fullerton set for an August relaunch with four new eateries.

And Aqua, famed in Hong Kong for its ultra-stylish harbourfront restaurant in Kowloon, will unveil its plans for its ‘Chinese fine-dining’ restaurant in Clifford Pier later this year.

‘We see The Fullerton Heritage as helping to enhance Singapore’s position as a leading tourist, business and lifestyle destination,’ said Ms Tan-Wijaya.

The radiant face of Singapore

Source : Business Times - 20 May 2008

From the Republic’s early days, the buildings that define its skyline reflect a nation that is increasingly vibrant, writes JOEL CHUA

IF a country had a face, it would be the skyline of its city. Like a portrait on a sky-blue canvas, it is the profile of a nation - as visually unique as the individuals who inhabit it. And, like a face, it reflects the character and spirit of its people too.

The economic success story of Singapore is not just recorded in the history books, but literally etched in stone. Well, concrete anyway. Soaring office towers decked out in glass and steel gleam proudly, shoulder-to-shoulder, scraping the sky above the Central Business District (CBD). But despite the rush to build on increasingly limited and expensive land, Singapore hasn’t become as suffocating a concrete jungle as many other developed cities. For all the human activity that is part and parcel of a bustling cosmopolitan city, Singapore’s business district is surprisingly well-ordered and efficient.

The brain behind the city’s pleasant face is the Urban Redevelopment Authority (URA). Since the mid-1970s it has been tasked with striking a balance between designing an aesthetically distinctive yet land-efficient cityscape. Beyond figuring out how to make the most of limited land, it also sees ‘the need for the CBD to be attractive and distinctive’. Indeed, the number of postcards that promote Singapore’s photogenic skyline to the world bear testament to the efficacy of URA’s work over the years.

What is also notable is how young - compared with other developed cities - Singapore’s cityscape is.

A significant early development that contributed to the definition of its skyline came about a couple of decades ago in 1986 with the completion of OUB Centre at Raffles Place. The tower, which has 63 floors and is 280 metres high, was the tallest building outside the United States at the time of its opening.

Today, 22 years later, it still stands as an icon, sharing the title of Singapore’s tallest building with two other structures - UOB Plaza One and Republic Plaza, the former having been completed in 1992 and the latter three years later. Together they comprise a triumvirate of titans that stand as towering witnesses to the economic growth of the nation.

But bigger plans are afoot for an island with ambitions bigger than its land mass. Reclamation has been actively pursued to meet the infrastructural demands of a burgeoning economy for decades. Between 1960 and 1990, 51.5 sq km of land was reclaimed, accounting for almost 10 per cent of Singapore’s total land area at the time. By 2030, it is estimated that another 100 sq km will have been added.

The swathe of land that houses the buildings in the Marina Bay area is, in fact, reclaimed. Comprising 3.6 sq km of prime real estate, it is the focal point of existing and future developments that will cement Singapore’s status as a financial and business hub. Set picturesquely by the waterfront, the area is set to evolve into what URA terms a ‘Garden City by the Bay’.

It is envisioned as a round-the-clock microcosm of cosmopolitan living, with a vibrant lifestyle and leisure component that will complement its business environment.

One way URA hopes to infuse more vibrancy in the area is to designate certain zones ‘white sites’, which means developers can mix commercial, retail and residential components within a single project.

But while many of these new buildings will have a premium view of the bay area and encompass a mix of lifestyle and business facilities, they will not soar as high as the other buildings in the vicinity. This is another deliberate feature - planners do not want to obstruct the view of earlier developments.

Graduating arrangement

In fact, a glance at a picture of Singapore’s existing skyline reveals that very trend. The result is a dynamic yet uncluttered and harmoniously graduating arrangement of heights that do not have to vie for the best view. One significant development now being built that will acquire some height and prominence in the cityscape is The Sail @ Marina Bay, a luxury condominium which, at 70 stories tall, will be among the 10 tallest residential buildings in the world when it is completed next year. Comprising two distinctively sail-shape towers that are bound to become iconic fixtures of the future skyline, it will provide 1,100 apartments with a splendid view of the bay area.

Another upcoming marquee project is the Marina Bay Financial Centre, a $2 billion complex of residential and commercial buildings that will peak at 55 stories. When it is eventually up, it is expected to add a considerable 150,000 sq ft of Grade A office space, effectively doubling what is currently available in Singapore. The first phase is expected to be ready by 2010.

In fact, when the entire Marina Bay area is fully developed and integrated with the existing financial district, it will be twice the size of London’s famous Canary Wharf financial district and will provide a combined total of 2.82 million sq m of office space, equalling what is available in Hong Kong’s main business centre.

The most prominent - and anticipated - of these new developments will, no doubt, be the Marina Bay Sands integrated resort that is set to open for business next year. It will be a ground-breaking project in many ways.

A drive across Benjamin Sheares Bridge, which overlooks the expansive site, reveals an orchestra of cranes and a flurry of construction work - an impressive sign of the scale of things to come.

Its one-of-a-kind Sky Park - a two-acre stretch of landscaped gardens that will be perched atop and bridge its three 50-storey hotel towers - will offer breathtaking views of the entire city. When completed, it will offer six million sq ft of retail and entertainment space, 3,000 hotel rooms and a plethora of lifestyle and leisure activities.

While it may not be the tallest upcoming structure, it will undoubtedly be deemed the crown jewel on the eventual skyline. Certainly, at an estimated cost of more than $5 billion, it is likely to be one of the most expensive projects of its kind in the world.

With Singapore’s expanding skyline gradually taking form, the fact that each new storey of every eventual building represents a business opportunity is not lost on the different businesses involved in the building industry.

A significant portion of the investment pouring into the city will go to them, as developers continue dreaming up more impressive edifices to meet those increasing demands.

In fact, the total amount generated by the construction and building industry here is expected to hit a whopping $55 billion by 2011.

Last year, the industry grew by almost 10 per cent and awarded $19 billion of contracts.

International building centre

While its position as a financial and leisure hub continues to solidify, Singapore is also becoming a centre for the international building and construction industry.

With such an array of opportunities available and its reputation for business efficiency, almost everyone in the industry’s supply chain is finding some reason to do business here. They are either directly involved in the local industry or use it as a regional hub to reach out to larger markets in the region.

A good example is the upcoming BEX Asia 2008 exhibition, when building material and equipment suppliers from around the world showcase their latest products and technologies in Singapore. The event, from May 21-23 at Suntec Singapore, is expected to attract prominent industry players, both local and international.

And so, as developers build bigger and taller, they will continue to redefine Singapore’s skyline in the process. From the smattering of grey monoliths that sprouted up in the early days of the economic boom to the myriad glistening peaks and pinnacles that scrape our skies today - and those that will join them in the future - the skyline represents the face of a nation which, as it matures, begins to look increasingly radiant.