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
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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
+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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