SINGAPORE’S second central business (CBD) district, the Jurong Lake District (JLD), will feature adaptable spaces for the future economy, given that business cycles will be shorter, and that businesses will have to adopt rapidly emerging technologies and more flexible business models. Such occupiers may find rentals of office space too high and the set-up too restrictive for creative juices to flow.
As Singapore’s second central business district, the JLD will consist of a core area around the Kuala Lumpur-Singapore High-Speed Rail (HSR) terminus. The area will comprise high-quality office spaces with mixed uses and be surrounded by clusters of business parks that provide flexible and adaptable work spaces for a good mix of complementary businesses and services of varying sizes. Examples include research and development facilities, educational and training institutes, small and mid-sized firms, business incubators and investment firms.
In launching its request for proposal (RFP) and inviting multi-disciplinary teams to develop master plan proposals for the JLD, the URA also unveiled a third new precinct in the district. Called Lakeside Gateway, this precinct has been envisioned as a mixed-use business precinct and home to the HSR terminus, which will anchor the JLD as “a district of the future” and Singapore’s second CBD.
A large part of the 112-hectare precinct is occupied by the Jurong Country Club, which has been acquired by the government. The JLD’s two other precincts unveiled earlier are the commercial hub of Jurong Gateway and the leisure precinct of Lakeside. In the longer term, Lakeside Gateway could be integrated with the surrounding areas such as the International Business Park, Teban Gardens and Pandan Gardens.
A key guiding goal in the master planning of the JLD is to achieve a more aggressive public transport mode share – one that is higher than the national target, which is 75 per cent by 2030. It will be distinguished by its high connectivity, accessibility and environmentally-friendly features, where smart and green mobility options are the choice modes of commute.
From among the multi-disciplinary teams participating in the RFP, the URA will shortlist up to five teams, which will develop their Concept Master Plans for JLD. When this is done, they will each receive an honorarium of S$200,000.
The team with the best Concept Master Plan will be appointed in February 2017, and work with the URA and partner agencies to draw up the Draft Master Plan for the JLD. There will be an exhibition of the Draft Master Plan around the third quarter of next year, during which the public will be invited to give feedback. After that, the appointed team will work with the URA to refine the plans. When this has been done, the team will be awarded S$2 million.
Industrial property prices eased last year after rising for 4 straight years. Rents fell consecutive for 2 years. The current gloomy manufacturing scene and supply glut in the near term should lead to further moderation in prices and rents. Industrial property prices fell 1.5% in Q4 from the preceding quarter, resulting in a full year fall of 1.7%. In the preceding year, the prices rose 3.5% in 2014. Vacancy rate islandwide rose 0.2% to hit 9.4% in Q4. This is the highest in 3 years. About 2.9 million sqm of industrial space will be ready this year, to be added another 1.6 million sqm next year. Average annual supply and demand of industrial space were just around 1.7 million sqm and 1.2 million sqm respectively over the past 3 years.
In the current gloomy property market, one sector shines as a bright spot. Data centre market are attracting more interest as a result of higher demand among finance and tech companies, not to mention the push by the Singapore government. The market size is expected to hit $1.8B in 216, a 25% increase over that in 2014.
ASCENDAS Real Estate Investment Trust (A-Reit) said it plans to acquire One@Changi City, a property at Changi Business Park, from two joint-venture partners, Frasers Centrepoint and Ascendas Pte Ltd, for S$420 million.
THE Housing & Development Board (HDB) on Thursday said that it has not accepted any bids for an industrial development site at Ubi Avenue 1 because “the prices offered were too low”. This surprised at least one consultant.
The Ubi site was launched for tender on June 30 this year. Situated just next to StarHub Green, it is zoned ‘Business 1’, with a site area of 0.6 hectares, a maximum gross plot ratio of 2.5, and a lease term of 30 years.
The tender attracted five bids in all. BP-DC Pte Ltd, a unit of Boustead Projects, submitted the highest bid of S$19.9 million, which translates to S$120.91 per square foot per plot ratio (psf ppr).
Tan Boon Leong, executive director of Industrial Services at Colliers, said: “S$121 psf ppr is quite a decent bid. I am quite surprised that HDB has rejected even the top bid. This is the market response to an oversupply situation. HDB’s decision is also not in line with the government’s intention to bring down prices.”
In the vicinity, OKH Holdings had bid S$23.3 million, or S$199.69 psf ppr, for a 0.43-hectare Tai Seng site. In March 2013, a site in Ubi went for a bullish S$172 psf ppr. But the industrial property market has weakened significantly since, with a huge supply expected to come onstream in 2016.
According to Mr Tan, the authorities would reject a bid when it is much lower than the chief valuer’s own valuation. They would also tend to not award a site when there is only one participant in the tenderer.
“But in this case, the participation is still quite healthy, the bids are still quite competitive. Quite a respectable bid, given the current market and especially with oversupply,” he said.
In this latest tender, Ascendas (Paya Lebar) put in the second highest bid of S$16.8 million. This was followed by Goldprime Development with a bid of S$13.6 million; Soilbuild Group Holdings with a bid of S$13.1 million; and YIHE Development (South Pacific) with a bid of S$8.8 million.
Earlier, consultants had expected the plot to pull in eight to 12 bids, with the top bid at S$100-120 psf ppr. They expected the site to garner good interest given that vacant industrial sites for sale in Ubi are rare.
The site is also very near MacPherson MRT station and has a 30-year tenure, considerably long since no site on the Confirmed List of the H2 2015 industrial government land sales programme has a lease of more than 20 years.
Singapore’s journey from a city with poor living conditions to a vibrant metropolis and global business hub is one that many countries have tried to emulate. This urban transformation helped to fuel the republic’s progress, and reflects the importance of infrastructure to socioeconomic development.
Led by government agencies such as the Economic Development Board (EDB) and JTC, Singapore introduced many innovations in the development of its industrial space, including groundbreaking projects such as the Singapore Science Park in the 1980s.
Modelled after similar developments in the US and Europe, the Science Park pioneered the concept of work-play business spaces here, seamlessly integrating high-quality business and research & development (R&D) infrastructure with lifestyle amenities and supporting services, set within a lushly landscaped campus environment.
Many of the first companies to carry out R&D activities in Singapore were located in the development. Today, it is home to some 380 companies employing more than 13,000 people, conducting a wide range of knowledge-intensive activities in areas such as IT, info-communications, biomedical sciences, pharmaceuticals and telecommunications.
Leveraging on their experience in developing projects like Science Park, Singapore companies started sharing their expertise overseas in the 1990s in projects such as the Suzhou Industrial Park in China.
Says Manohar Khiatani, deputy group CEO of Ascendas-Singbridge and president & group CEO of Ascendas: “Singapore Science Park’s success also laid the groundwork for further growth of business parks in Singapore and Ascendas’ foray overseas, bringing the Singapore brand and experience to the international arena,”
In 1994, for instance, Ascendas pioneered India’s first work-live-play IT Park, International Tech Park Bangalore (ITPB) in the Whitefield region. Today, ITPB houses a community of over 35,000 professionals.
More recent projects have reflected Singapore’s move up the value chain into sectors such as biomedical and chemicals. Underpinning its strategy is the concept of clustering, which involves putting related companies from a specific sector in one location.
This “co-location” allows support services to be provided efficiently to companies from that sector, and creates business opportunities for the supporting SMEs. For instance, the JTC BioMed One at Tuas Biomedical Park comprises a Vendors Hub, which houses SMEs providing a range of supporting services to the larger biomedical companies.
Lim Hng Kiang, Minister for Trade and Industry, in a speech at the Groundbreaking of JTC Space @ Tuas earlier this year, said: “For industrial space provisions, we also made a deliberate effort to cluster and integrate companies very early on. Jurong Island is a classic example. We clustered companies along the value chain of the chemicals industry, connected them through seamless corridors of common services infrastructure, and created significant business and logistical synergies.”
JTC Space @ Tuas takes the clustering concept one step further by supporting both heavy manufacturing industries such as the oil and gas sector, as well as lighter manufacturing industries such as precision engineering.
Going forward, Singapore will need to continue innovating when it comes to developing its infrastructure to meet the evolving needs of the economy.
Loo Choon Yong, chairman of JTC said in a speech in February: “As land is, and will continue to be a constraint in a small country like Singapore, we have explored ways to create new industrial land and space to meet the demand of industrialists.”
To increase the supply of land, the government has reclaimed land from the sea and also explored the use of underground space for various purposes. The massive Jurong Rock Caverns (JRC) – South-east Asia’s first underground storage facility designed to hold crude oil and other liquid hydrocarbons – is one striking example of this. The S$1.7 billion project was first conceptualised in 2001 and launched in September 2014.
The nine-storey caverns can hold 1.47 million cubic metres, or the equivalent of 580 Olympic-sized swimming pools. More importantly, it also frees up 60ha of usable land, or about 84 football fields.
Singapore is also giving a new lease of life to older industrial estates so that they can support new industries as well as the growth of existing ones. For instance, Tanjong Kling estate has been re-developed to support high value-added manufacturing activities.
Reflecting its success as a model for development, the World Bank Group announced last month that it will be expanding its Singapore office to create its first Infrastructure and Urban Development Hub. The hub will focus on the funding of sustainable infrastructure and urban development, in order to ensure access to markets and basic services.
“Singapore’s ability to transform infrastructure investments into productive assets for economic growth and increased prosperity, as well as its capacity to undertake sustainable urban planning, stands as an example to many developing cities and countries,” the World Bank Group said in a statement.
Going forward, Singapore will need to marry sustainability with its continued drive to develop infrastructure. Prime Minister Lee Hsien Loong unveiled Singapore’s smart and sustainable city plan last year, which encourages the adoption of technological innovation to build community, increase productivity and enhance the quality of life.
“Singapore’s development has reached a turning point, where our sustainable future lies in achieving a strategic balance of economic growth with societal well-being and environmental quality,” says Mr Khiatani.
He adds: “In a dense built-up environment such as Singapore, the opportunities for real estate companies such as Ascendas to capitalise on technological advances to enhance the efficiency and performance of our buildings are immense.”