resurgence of mixed use developments in singapore cbd

8/10/2019 Resurgence of Mixed Use Developments in Singapore CBD

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Resurgence of Mixed-Use

Developments in Singapores CBD

December 2014


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Mixed-use developments are nothing new globally, but they have seen

somewhat of a resurgence in Singapore over the last few years. The

Singapore Central Business District (CBD) has been undergoing a

transformation since the early 2000s with the governments push to

encourage city living and ensure that the CBD remains lively during

both the evenings and the weekends. Historically, the CBD has

been dominated by pure ofce buildings plus a number of hotels and

supporting retail amenities.

A new push on city living started in the mid-2000s with residential

developments such as The Sail @ Marina Bay, which is located in

the heart of the CBD in Marina Bay. The CBD today is punctuated byvarious non-ofce use developments. Residential apartments have

sprouted up all over the CBD, from Tanjong Pagar to Beach Road,

and a number of new hotels managed by international chains have

emerged in the city, either in the form of new buildings or revamped

and reused existing buildings.

The transformation efforts were initiated by the Singapore authorities

with the goal to turn the growing CBD into a vibrant district round

the clock by encouraging a mix of uses commercial, residential,

hotel and entertainment. This vision of a more vibrant CBD was in

reaction to a global trend of extending the activity in the CBD beyond

the standard ofce hours, and to recoup the large investment in

infrastructure that has gone into developing the area.

This transformation would not have been possible if not for two key

enablers.

Introduction

2 White Paper | 2014


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The key planning initiative that has driven this is the concept of white

site zoning. The concept of white sites was rst introduced by the

Urban Redevelopment Authority (URA) in 1995 to give developersmore exibility in planning the composition of land use on certain land

parcels sold by the state through the Government Land Sales (GLS)

programme. Under the URAs white site guidelines, developers can

decide on the mix of uses and the respective quantum of oor space

of each use as long as the total permissible gross oor area (GFA)

for the whole development is not exceeded. Some sites also include

a minimum xed percentage of the development to be dedicated to a

use decided by the government, which is often an ofce space in the

CBD and the rest is up to the developer. Some recent GLS plots have

also had a percentage stipulated for hotel use. The exibility of land

use given to a white site allows developers to develop schemes that

respond best to changing market conditions. Developers thereforehave a stronger chance of matching demand and supply. White sites

can generally include commercial (ofce and retail), residential or hotel

use, or a mix of these uses. This also means that from an investor/

developers point of view, a mix of asset classes also serves to

spread the risk and mitigate a particular usage being in a down cycle.

Many developers also use the presale of any residential component

to offset the upfront costs and improve the cash ow for the entire

development.

Development Year Completed / Due OfceComponent

Hotel / ServicedApartment Component

RetailComponent

ResidentialComponent

ConventionCentre

Rafes City 1985 Yes Yes Yes

Suntec 1994 Yes Yes Yes

UE Square 1997 Yes Yes Yes Yes

MBFC 2010/12 Yes Yes Yes

Asia Square 2011/13 Yes Yes Yes

South Beach 2014 Yes Yes Yes Yes

Duo 2016 Yes Yes Yes Yes

Marina One 2016 Yes Yes Yes

Tanjong Pagar Centre 2016 Yes Yes Yes Yes

OUE Downtown 1994(refurbishment expected to be

completed in 2016)

Yes Yes Yes

Artist impression of Guoco Tower a mixed development by Guoco Land

Flexible Planning

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The result of this planning has been the successful emergence of

mixed-use developments that bring life to the CBD beyond normal

business hours. Mixed-use developments have proved to be veryappealing to users across many global cities. Pacic Placein Hong

Kong originally comprised three hotels (the Shangri-La, Marriott

and Conrad), two ofce towers and a shopping centre when it was

developed back in the late 1980s. The development has always

enjoyed high occupancy rates as users enjoy the convenience of

having multiple amenities located under one roof. From an ofce

occupiers viewpoint, a hotel and strong retail offering provide

excellent convenience to staff and visiting clients. The hotels and retail

in turn benet from the patronage of the ofce occupiers. On the back

of its success, this development has since been further enhanced

with the addition of another hotel (The Upper House) and a third ofcetower.

Successful developments in Singapore include Rafes City, which was

completed in the mid-1980s and comprises an ofce tower, two hotels

(Swisstel The Stamfordand the Fairmont Singapore) and a retailmall. Despite the growing presence of newer ofce developments

in the CBD, Rafes City Towerhas consistently maintained high

occupancy rates.

More recently,Asia Square(2 million sq ft of ofce space, The

Westin Singaporehotel and more than 60,000 sq ft of retail space)

has become the rst Grade A ofce development in the CBD to

encompass a 5-star hotel within the building. There are a number of

notable new schemes in the pipeline, including South Beach(500,000

sq ft of ofce space, a hotel, luxury residences and retail space) and

the Tanjong Pagar Centre, which includes a 900,000 sq ft ofce tower

(Guoco Tower), a hotel, luxury residences and retail space.

Artist impression of South Beach a mixed development by CDL



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Scale Economies and Accessibility

Another key factor to the success of these mixed-use developments

is scale economies and transportation links (subway access). Besides

a more productive use of space, mixed-use developments also bringabout land use synergies. Combining multiple uses within a single

development allows developers to share common resources within

the overall development, lowering development costs and maximising

the use of the land. A steady ow of foot trafc, drawn from residential

occupants, hotel guests and ofce tenants, also serves to create

buzz within the development throughout the day and night. The cross

selling of services and amenities to stakeholders within the same

development also builds up a small community, acting as a win-win

and further encouraging a timeefcient productive community. While

retailers benet from a stable catchment of shoppers, the occupiers

likewise gain from the convenience of having retail right on thedoorstep.

For ofce tenants, the diverse mix of offerings within mixed-use

developments undoubtedly raises the appeal of ofce space to

their staff. Besides the doorstep convenience offered by the retailcomponent, the presence of hotels and residential units within the

same development provides an added benet for ofce workers and

visiting guests and reduces overall travelling time.

The efcient connectivity of the development to other parts of the city

through integration with the public transit system offering the occupier

alternatives other than relying on private automobiles makes such

a project highly efcient and functional. The transport connectivity

improves not only the accessibility for the occupiers, but also enlarges

the market catchment for the entire project, especially retail.

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The Future is Mixed

On the back of ever-growing concerns over environmentalsustainability and labour productivity, we envisage more mixed-

use development. While there is still very much value in single use

schemes, given the popularity of mixed-use developments with

occupiers and therefore investors, we will see further developments of

this kind in the future, which will continue to add to the vibrancy of theCBD. Certain areas such as Marina Bay, given its greeneld nature,

need to be carefully orchestrated to ensure that supporting amenities

are sufcient, and mixeduse schemes prove very effective in this

regard.



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About JLL

JLL (NYSE: JLL) is a professional services and investmentmanagement rm offering specialized real estate services to clients

seeking increased value by owning, occupying and investing in real

estate. With annual fee revenue of $4.0 billion and gross revenue of

$4.5 billion, JLL has more than 200 corporate ofces, operates in 75

countries and has a global workforce of approximately 53,000. On

behalf of its clients, the rm provides management and real estate

outsourcing services for a property portfolio of 3.0 billion square

feet, or 280.0 million square meters, and completed $99.0 billion in

sales, acquisitions and nance transactions in 2013. Its investment

management business, LaSalle Investment Management, has

$53.0 billion of real estate assets under management. JLL is the

brand name, and a registered trademark, of Jones Lang LaSalle

Incorporated. For further information, visit www.jll.com.

JLL has over 50 years of experience in Asia Pacic, with over 27,500

employees operating in 80 ofces in 15 countries across the region.

The rm was named Best Property Consultancy in seven Asia Pacic

countries at the International Property Awards Asia Pacic 2014, and

won nine Asia Pacic awards in the Euromoney Real Estate Awards

2013. www.ap.jll.com

Chris Archibold International Director at JLL and is Head of Markets

in Singapore. He is responsible for the delivery of transactional and

advisory services to our clients in Singapore. Chris is also a member

of the Asia Pacic Markets Executive Committee. Chris is a Fellowof the Royal Institution of Chartered Surveyors (FRICS) with over 20

years experience of advising both occupier clients and developer/

investor clients principally in Asia Pacic and in EMEA (Europe Middle

East & Africa).

Dr Chua Yang Liang, Head of Research, Jones Lang LaSalle, South-

East Asia leads the Jones Lang LaSalle research teams in the South-

East Asia region, encompassing Indonesia, Malaysia, the Philippines,

Singapore, Thailand and Vietnam. Trained as an urban planner, Dr

Chua brings to the Firm a different perspective to the fundamental

research on the property market. He publishes original research on

regular property market updates, rental and price indices, topical

property market matters, as well as consultancy assignments.

About the authors

Chris Archibold

Head of Markets, JLL

[email protected]

+65 6494 3750

Dr Chua Yang Liang

Head of Research, South-East Asia

[email protected]+65 6494 3721


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www.jll.com.sg

Jones Lang LaSalle 2014 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

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resurgence of mixed use developments in singapore cbd

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