A food factory with a riverfront promenade, a heritage terrace block, and a central plaza designed for public events and community activities is not something Singapore's industrial landscape has seen before.

That is what CapitaLand Development (CLD) is bringing to the Kallang precinct with Gourmet Xchange, its upcoming integrated food hub.

Situated at 1 Kallang Way, the 272-unit development will include a nine-storey, multi-user ramp-up food production block, as well as a three-storey block of heritage terraces. The latter is an adaptive reuse of the 1980s flatted factory that stands on the site.

Read also: Far East Organization sells Tuas warehouses for $322 mil in record logistics deal

CLD is positioning Gourmet Xchange as a so-called “food hub 2.0” — a production facility integrated with dining, community spaces, architectural heritage and riverfront placemaking.

"What we’re building is not a conventional industrial building,” Ronald Tay, CEO of CapitaLand Development (Singapore), tells EdgeProp Singapore. "It’s future-ready and caters to the needs of occupiers and the community at large.”

Sales bookings of the strata units open on March 13. With a mix of unit types, CLD aims to accommodate a wide range of business models across the food industry value chain, including production facilities, storage, distribution, F&B outlets, foodtech players and labs.

Indicative prices for the food production units start from $2.3 million for the smaller units spanning 295 to 393 sq m (3,175 to 4,230 sq ft), and from $6 million for larger units of 570 to 758 sq m (6,135 to 8,159 sq ft). Vacant possession is expected in 2029, with legal completion in 2032.

Breakdown of unit types:

Catherine He, Colliers Singapore’s head of research, finds the project well-designed to meet the needs of regional-scale operators as well as central and cloud kitchens.

“The potential mix of occupiers is attractive, given the long-term demand for Singapore food manufacturing and distribution, and if the management is able to actively curate a balanced, complementary tenant base,” she adds.

Read also: The Peranakan Club: A labour of love and feast for the senses, steeped in heritage

'As central as it gets'

For food operators, their location often has direct implications for freshness, logistics efficiency and response times.

Most of Singapore’s food factories are currently clustered in peripheral industrial estates such as Mandai, Senoko, Woodlands and Jurong.

Located in Kallang, Gourmet Xchange breaks from that pattern. Served by four major expressways and within walking distance of three MRT stations, the development is about a 20-minute drive to the CBD, Marina Bay, Orchard Road shopping district, Changi Airport and the East Coast dining belt — areas with a high concentration of restaurants and high F&B spend.

Tay likens Gourmet Xchange to a “CBD of food hubs” and says that from a distribution perspective, “Kallang is as central as it gets”.

For businesses supplying the local F&B scene, the location shortens delivery times; preserves food quality, freshness and safety; and improves last-mile efficiency for both retail and delivery-led formats.

In particular, food factory spaces in the Central Region are sought after by operators as central kitchens, for delivery cost and time efficiency, according to Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W). Rising retail rents are also prompting more F&B operators to turn to central kitchens, which are more cost-effective.

Read also: Industrial building in Leng Kee for sale at $49 mil

Central food factories command monthly rents of $3.00 to $4.00 psf, versus $2.00 to $2.60 psf in the suburban areas of Singapore, based on C&W research data.

Moreover, supply is constrained, as not all sites are suitable to be converted to food factory use and the majority of land currently zoned for food production has already been developed, Wong says.

Oliver Siah, co-founder of Singapore-based co-investment platform Fraxtor — which had earlier fractionalised a minority stake in Gourmet Xchange for accredited investors — lauds the proximity to a large population catchment. He notes that the site is a roughly 20-minute drive to Northpoint City, Clementi Mall, Bukit Timah landed housing enclaves, Tampines, Jewel Changi Airport, as well as future projects in the Greater Southern Waterfront and Paya Lebar redevelopment.

JTC has designated only eight approved food factory locations. Among these, just one cluster is within the Central Area, including Kampong Ampat, Paya Lebar iPark, Tai Seng, Kampong Ubi and Aljunied, where the Gourmet Xchange site is situated, says Marcus Chu, CEO of ERA Singapore.

Businesses will likely also have easier access to a larger workforce pool, as it is near Mattar MRT Station and residential estates. Given the operational advantages, “businesses are likely to perceive centrally located food factory spaces positively, and may be willing to pay a premium”, Chu adds.

Food businesses with existing production facilities in other industrial estates have expressed interest in taking up units at Gourmet Xchange as satellite kitchens or satellite distribution centres — enabling faster responses to urgent orders or last-minute restocking for CBD restaurants.

As for firms with export or cross-border operations, being near transport nodes like airports and shipping terminals adds another layer of appeal. Multinational companies anchoring their Southeast Asia headquarters or regional distribution operations in Singapore are among the key occupier profiles the development may be suited for.

The appeal of a central location can be seen from the sales and rental volumes of multi-user factories, says Huttons Asia CEO Mark Yip.

Sales volumes of multi-user factories in different regions of Singapore:

Rental volumes of multi-user factories in different regions of Singapore:

Purpose-built for food businesses

Gourmet Xchange is Singapore’s largest strata-titled food facility and features high-capacity infrastructure, including rare, large contiguous spaces ranging from 3,000 to 7,000 sq ft — over twice the size of typical small industrial units.

The unit sizes enable growing businesses to scale within the same hub and give more room for automation equipment and variations in layouts. “Many companies want to have the space to scale up. That’s where we identified the gap,” says CLD’s Tay.

Another key feature is ramp-up access for 40-footer container trucks on the first three floors of the main block, allowing the trucks to drive directly to a unit to park, load and unload. Units on upper floors can handle 40-footer deliveries via a service lift. The development also has 16m-wide driveways and generous ceiling heights of up to 7m.

Siah of Fraxtor sees potential to build a cohesive ecosystem of food players across the value chain under one roof. Food delivery platforms could also consolidate pick-ups from multiple central kitchens in a single trip, cutting delivery costs and emissions, he says.

In PropNex’s view, clustering or integration of related businesses can provide tenants with opportunities to collaborate, improve efficiencies and benefit operationally.

Having a variety of unit types also enables the developer and owners to tap into different space demand drivers within the food production and logistics value chain, and consumer-facing F&B outlets, says PropNex CEO Kelvin Fong.

Moreover, the diverse, scalable spaces align with Singapore’s evolving food industry — where businesses increasingly require flexible spaces that can house various operations. “For instance, an operator could have a production facility, an R&D centre, a central kitchen and an F&B outlet in one development,” Fong adds.

Heritage terrace: Adaptive reuse and value creation

Eight of the 272 units at Gourmet Xchange take the form of three-storey terrace stacks at the low-rise Heritage Terrace block.

The retention and repurposing of the existing building was a requirement of the Industrial Government Land Sale (IGLS) tender, to preserve the site’s historical and cultural significance while reducing carbon emissions that will otherwise arise from demolition and construction.

This marked JTC’s pilot of adaptive reuse on an IGLS site, in line with its longer-term industrial sustainable rejuvenation strategy.

Built in the 1980s, the block is the last remaining three-storey “terrace-showroom” type factory cluster in Singapore. CLD will preserve architectural elements including the iconic gable-end wall profiles and protruding solar fins.

SRI’s head of research and data analytics, Mohan Sandrasegeran, reckons adaptive reuse can enhance a development’s identity and character, introducing “architectural diversity and a sense of place often absent in conventional industrial estates”.

For occupiers — particularly those in food innovation, foodtech and related segments — such spaces also provide operational functionality and branding value. “The preserved industrial character can convey authenticity and sustainability credentials that resonate with increasingly ESG-conscious businesses and consumers,” says Sandrasegeran.

CLD sees an opportunity for value creation in adaptive reuse. “We hope to seamlessly bring together, from an architectural and a business perspective, the first-generation flatted factory with the modern facility we're building," Tay says. “This will create a differentiated product for users and communities.”

Each three-storey stack in the Heritage Terrace spans 598 to 753 sq m (6,437 to 8,105 sq ft). The ground floor can be run as a restaurant and the upper floors used for food production, research or storage.

To buy or to rent?

Tay expects the majority of buyers to be end-users in the food industry, though he does not rule out investor interest.

Analysts generally note that owning, rather than leasing, would often make more sense for established, well-capitalised operators, as it enables them to hedge against rising rents and offers long-term cost stability.

Besides, food production facilities may require specialised fit-outs and regulatory approvals. “This can make frequent relocation a hassle, not to mention a potentially costly move,” says Fong from PropNex.

Owning their spaces will also mean they can tap on any potential capital appreciation upside in the future, Fong adds. Industrial property prices in Singapore have seen steady growth, posting five straight years of increase from 2021 to 2025, as per the JTC industrial property price index.

With interest rates trending lower, it can be more cost-efficient to buy than to rent. Huttons’ analysis finds that over the past five years, when interest rates decreased, more strata-titled multi-user factory units were transacted.

Comparing interest rates and transactions of strata-titled multi-user factory units:

On the other hand, an up-and-coming or new-to-market operator “may be better off renting, given the uncertainties they face regarding the long-term acceptance of their offerings”, says Alan Cheong, Savills Singapore executive director, research and consultancy.

Colliers’ He likewise notes that new entrants and smaller, mid-sized players might prefer to lease unless they have very stable demand or surplus capital. Leasing also gives them the flexibility to test concepts, or to scale up or down according to market conditions.

Owning a slice of the food hub

For investors, strata units in Gourmet Xchange are likely to appeal as a niche, income-focused play, in He’s view. They might potentially see mid-single-digit yields and scope for measured capital upside, supported by a limited supply of modern food factories and resilient occupier demand, though returns will be deal-specific, she adds.

Wong highlights that transactions of strata food factory units have been profitable. Based on C&W’s basket of properties, strata food factory prices (on a 30-year leasehold basis) have grown at a 3.2% compound annual growth rate in the last five years, and 12 out of 16 units sold in 2025 made a profit. Indicative gross yields for 30-year leasehold food factories range between 6.0% and 7.0%, Wong adds.

ERA’s Chu points to the limited availability of centrally located industrial space: “New B2 (Business 2) developments in prime locations are becoming increasingly rare, as such projects typically arise from redevelopment or adaptive reuse of existing sites.”

Opportunities for new supply in these areas are therefore scarce, which can support capital growth over time and enable such developments to command relatively higher rents, Chu says.

SRI’s Sandrasegeran says the specialised infrastructure and central accessibility could support healthy tenant demand and relatively stable rental yield potential. Developments offering an integrated ecosystem for the food value chain may also benefit from more resilient capital values over the long run as the asset becomes more differentiated within the broader industrial market, he adds.

CLD positions Gourmet Xchange as a “food hub 2.0”, pricing it “competitively” while reflecting its differentiated offering, Tay says.

He points out that sales are not expected to move as quickly as most residential launches. “Industrial developments will take a little bit of time. But overall, we are quite confident that we will substantially, if not fully, sell this project by the time it is completed,” he adds.

For those seeking an alternative way to invest in the development, Fraxtor offered one ahead of the sales launch. In February 2025, the co-investment platform announced that accredited investors had fully taken up a tokenised minority stake of about 13.5% in the development. This was Singapore’s first partially tokenised GLS through a regulated platform, according to Siah.

With a minimum investment of $25,000, investors gained exposure to the project alongside Fraxtor’s founders on the same terms, structured as a collective investment scheme with an estimated holding term of 60 months.

Those participating via Fraxtor are able to invest alongside CLD and diversify their portfolios, Siah notes. “Development projects are highly opportunistic with higher risk and higher returns, as compared to owning an investment property,” he adds.

PropNex anticipates food hubs and food factories to remain relevant over the long term, as they play a key role in strengthening Singapore’s food resilience. At the same time, changing consumer preferences and digital transformation will shape the food sector, which will require modern food factories to evolve, Fong notes.

ERA has observed many established food brands with multiple outlets increasingly adopt a central kitchen model to streamline operations. In the coming years, more will require well-located food production facilities, says Chu.

As this is one of few centrally located food factories that will come onto the market from now till 2029, demand should hold up, according to Savills’ Cheong.

Singapore's food manufacturing and processing sector has been expanding, with growth in convenience foods, ready-to-eat meals, health-focused products and alternative proteins. That is expected to keep generating new factory and central kitchen requirements, notes He of Colliers.

“Government policies also encourage centralisation and outsourcing of food preparation for productivity and cost reasons,” she says.

Together, the combination of policy support, consumer trends and the scarcity of modern, central food‑grade space points to continued robust underlying demand by the time Gourmet Xchange is completed.

A new benchmark for industrial Singapore?

Gourmet Xchange reflects an evolution in how industrial areas could be planned or refreshed in Singapore.

JTC looks forward to working with more developers "to advance sustainable rejuvenation approaches that breathe new life into Singapore's mature industrial estates”, says Christine Wong, assistant CEO of the government agency.

Yip of Huttons believes the design and placemaking elements will “change the way the community views industrial spaces”.

Eileen Tan, senior manager, retail, at Knight Frank Singapore, shares: “The riverfront community spaces and fitness areas will help soften the otherwise dry and boring image that comes with industrial zones.” These would make it more welcoming for workers in the surrounding factories and nearby residents who may otherwise have little reason to spend time in the area.

The inclusion of F&B outlets, food kiosks and an industrial-style canteen also serve a very practical purpose of providing additional food options typically limited in industrial estates.

Tan further notes that maintaining a cohesive and relevant tenant mix could be a challenge, as it is a strata-titled development. “Hence, sustained placemaking and coordinated tenant strategies will be important for the precinct to remain vibrant and relevant to the community,” she adds. To achieve this, she suggests a single landlord could own the F&B units to manage the trade mix.

Gourmet Xchange may provide a useful reference for future niche industrial sectors with consumer-facing elements. As land constraints become more pronounced and business models evolve, there is growing interest in developments that integrate production spaces with lifestyle and community elements, says SRI’s Sandrasegeran.

The adaptive reuse also encourages the clustering of innovative enterprises and creative industries that value distinctive and well-connected workspaces, he adds.

Gourmet Xchange may serve as a model for other industrial sites in the future, albeit likely on a smaller scale, in Savills’ view. “Unless food factories in other parts of Singapore are taken off the market, the F&B sector, though it has an appetite for food factories, may not be able to absorb similarly large spaces,” Cheong says.

Colliers’ He notes that if Gourmet Xchange achieves good occupancy, smooth operations and strong community usage, it will strengthen the case for more riverfront or city-fringe industrial redevelopments that combine food or light industry with curated public amenities.

The project directly supports URA’s initiatives to rejuvenate older industrial estates along Kallang River into more mixed, community‑oriented places, with better waterfront access and public spaces.

“This dovetails with broader moves to allow more flexible, multi‑functional industrial land use, so successful execution here will give planners and agencies a concrete case study to replicate in other corridors,” she says.

“However, industrial zones like Mandai or purely B2 estates will still favour more traditional, production‑centric designs,” adds He.

CLD’s Tay believes that the industrial sector will see more mixed-use projects and intensification of land use in the coming years, with connectivity and community engagement becoming common features.

For more news and analysis, read our weekly e-paper. Prefer a print copy? Get it delivered to your home every Monday.