Beach Road’s changing skyline
By Cecilia Chow
/ EdgeProp Singapore |
From Guoco Midtown and Shaw Towers to the new residential developments at Tan Quee Lan Street and Middle Road, the Beach Road-Rochor Road area is set for a massive renewal
For the past four decades, those driving along Nicoll Highway from Singapore’s East Coast to the CBD have been treated to the landmarks defining Beach Road’s skyline: first, the Golden Mile Complex and Tower, a relic of the 1970s; followed by the 1990s modernist architecture of The Concourse, designed by the late American architect, Paul Rudolph, and the knife-edged triangular towers of The Gateway by the legendary American-Chinese architect I M Pei who turns 102 this year.
In recent years, the skyline has been enhanced by the addition of two multi-billion-dollar integrated developments designed by star architectural firms of the current era, namely DUO by Buro Ole Scheeren, and South Beach by Foster and Partners.
DUO, an integrated development by M+S, completed in Dec 2016, was designed by Buro Ole Scheeren (Credit: M+S)
“The stretch of Beach Road from Ophir Road and Rochor Road onwards has changed a lot,” says Cheng Hsing Yao, group managing director of listed property group GuocoLand Singapore. “But the eastern stretch of Beach Road is still quite old.”
GuocoLand is developing Guoco Midtown, a new integrated development at the junction of Beach Road and Bras Basah Road. Adjacent to Guoco Midtown is Shaw Tower, which will be redeveloped. A commercial tower built on a site sold in the government land sales (GLS) programme in 1970, Shaw Tower is a redevelopment of the former Alhambra and Marlboro theatres, and also where the original Satay Club at Hoi How Road was located. The 34-storey tower contains offices from the 11th to the top floor, carpark lots from the second to 10th floors and a retail podium with two cinemas. Shaw Tower is owned by Shaw Foundation, which was established in Singapore in 1957.
‘NEW ADDITIONS’
The new commercial development that will replace the existing Shaw Tower will be predominantly office with a total net lettable area of 222,700 sq ft. “The redevelopment of Shaw Tower is overdue,” says Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W).
Construction is underway at the Guoco Midtown site, with the adjacent Shaw Tower to be redeveloped into a new commercial development (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The new Shaw Tower and Guoco Midtown will be linked to each other and to their neighbouring developments on the second level, and by underground pedestrian links to the MRT stations. For instance, there will be an underground link from Guoco Midtown to Bugis MRT Interchange Station for the Downtown and East- West Lines. From South Beach, they will have direct access to Esplanade MRT Station on the Circle Line. South Beach is also linked directly to Suntec City via an overhead bridge that brings pedestrians to City Hall MRT Interchange Station for the North-South and East-West Lines.
“Guoco Midtown and the redevelopment of Shaw Tower will be new additions that will complement South Beach and DUO,” says Chris Archibold, JLL head of leasing. “They will bring a critical mass of Grade-A office space to the area, which GuocoLand has aptly branded ‘Midtown’.”
There will be very little new office supply in the next two years until Guoco Midtown is completed. South Beach Tower, which contains about 500,000 sq ft of premium office space, and was completed in 2015, is full today, says Archibold. Likewise, DUO Tower, which has 568,000 sq ft of office space, and was completed in 2017, is also almost full. The average rent in these two towers is said to be around $11 psf. Guoco Midtown is expected to trade at “double- digit rents”. However, the office tower in the development will only be put up for lease two years from now. “Our view of the market is very positive,” he adds. “The supply pipeline is fairly low, and demand seems fairly robust across many different sectors.”
The new redevelopment on the site of Shaw Tower will have predominantly office space and will be linked to the neighbouring South Beach and Guoco Midtown (Credit: Samuel Isaac Chua/EdgeProp Singapore)
JLL’s basket of premium, Grade-A office buildings are made up of those that are under 16 years old and have floor plates of at least says Archibold. “Whether they are in Marina Bay, Raffles Place or Tanjong Pagar, they are all trading at around $11 psf per month.”
MIXED-USE APPEAL
Beach Road appeals to a wide spectrum of occupiers, notes Moray Armstrong, CBRE Singapore managing director. Potential tenants could include fintech, technology, energy sector, co-working operators and MNCs that appreciate the accessibility within the CBD, he adds. “We anticipate the new developments will attract tenants keen to upgrade and flight-to-quality will be a feature of tenants’ relocation drivers.”
Planned as a mixed-use district with offices, hotels and residences, “the Beach Road/ Ophir-Rochor corridor primarily serves as an extension of the central business district due to its proximity to Raffles Place and Marina Bay,” adds Armstrong. “The area is also unique due to its heritage and cultural vibe from the Kampong Glam conservation area. It has ‘the cool factor’. The existing commercial building architecture in this micro-market is particularly distinctive.”
When South Beach Tower first entered the market five years ago, 80% of prospective office occupiers were already drawn to the location. “The Beach Road area has a very nice mixed-use feel,” says JLL’s Archibold. “There’s a fair amount of retail and F&B in the area, and you’re also near a very large retail mall of over a million sq ft at Suntec City. From an immediacy point of view, it works very well.”
Completed in 2015, South Beach Tower contains about 500,000 sq ft of Grade-A office space is full today (Credit: Samuel Isaac Chua/EdgeProp Singapore)
Construction has already started at Guoco Midtown, located on a 2.1ha GLS site purchased by GuocoLand in October 2017 for $1.622 billion.
Designed by acclaimed Australian architectural practice, Denton Corker Marshall, Guoco Midtown is scheduled to be completed in 2023. The property, which has a gross development value of $2.4 billion, will contain a 30-storey Grade-A office tower linked to a five-storey Network Hub. Office space will account for 770,000 sq ft (81%) of the total gross floor area (GFA) of 950,000 sq ft within the development.
Landscaped public spaces comprise a total of 170,000 sq ft spread across multiple floors. There will also be a 32-storey residential tower with more than 200 units, called Midtown Bay. Within the site is a three-storey, conserved colonial- era building that once housed the Beach Road Police Station.
‘BUILT-IN FLEX COMPONENT’ TO CHANGE LEASING MODEL
GuocoLand has announced that it will be offering a “core and flex” leasing concept at Guoco Midtown. The floor plates of the office tower are rectangular in shape and measure 27,000 to 30,000 sq ft. There are also four different access points in each floor, which makes it very efficient for sub-division, says JLL’s Archibold.
CBRE’s Armstrong agrees: “Where Guoco Midtown stands out is that it specifically incorporated agile areas and facilities into the development’s design concept,” he says. “We are likely to see changes in lease contracts whereby end-users’ core occupied space is leased for conventional, longer periods, while a proportion of the space is held under shorter and more fluid terms.”
This in turn will change leasing models, says Armstrong, where core leased space will be offered at a lower cost base, with a premium payable for flexibility. “This is akin to an airline ticket whereby the customer pays a higher price for a ticket that can be changed versus one that is more rigid,” he adds.
Guoco Midtown will have a total of 770,000 sq ft of Grade-A office space and is scheduled to be completed by 2023 (Credit: GuocoLand)
‘ENLARGED RESIDENTIAL CATCHMENT’
Located directly across the road from the upcoming Guoco Midtown is an empty green plot of 124,119 sq ft, flanked on one side by the conservation shophouses along Tan Quee Lan Street.
The GLS site has been earmarked by URA for a residential development of about 580 units, with a maximum height of 30 storeys, and a low-rise block of six storeys. The first level will be allocated to commercial space. The site will be launched for sale in May, with the tender to close in September.
Meanwhile, just one block away on Middle Road, another GLS site was sold in early April to listed property developer Wing Tai Holdings. The group had emerged at the top of 10 bids received at the close of the tender on March 29. Wing Tai’s bid price was $492 million ($1,458 psf per plot ratio).
The Middle Road GLS site was sold to Wing Tai for $492 million or $1,458 psf per plot ratio (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The site, which covers 80,000 sq ft, will be developed into two high-rise, 20-storey residential towers with a low-rise block containing commercial units on the first level and residential units on the upper levels.
“As it is within the Central Area, we are excited by the excellent opportunity to create a fresh, exciting living space that caters to urbanites who desire to live in the city and experience its vibrant, cosmopolitan culture,” says Tan Hwee Bin, executive director of Wing Tai Holdings.
C&W’s Li expects the future projects to “enlarge the residential catchment in the area” and further boost the attractiveness of the sub-market. “On the one hand, you have more residential developments which cater to the expatriate community in town,” she says. “On the other hand, you have more top-notch corporate clients coming over from older CBD buildings to take up office space in this up-and-coming submarket.”
DIFFERENTIATED OFFERINGS
The residential site at Tan Quee Lan Street will be put up for launch sometime later this month (Credit: Samuel Isaac Chua/EdgeProp Singapore)
She reckons the new 99-year leasehold residential developments in the area are likely to have selling prices in the $2,550 psf to $2,800 psf range, depending on the unit sizes. “The products will be differentiated to suit the spectrum of buyers and tenants at Beach Road,” adds Li.
For instance, at South Beach Residences, which was launched last September to coincide with the Singapore Grand Prix, prices of units sold started from $2,795 psf for the lowest floor on the 23rd level to a high of $3,950 psf in the first month of sales. The super penthouse, a triplex, was sold for $26 million ($3,865 psf) last October. Units in the 190-unit luxury residence occupy the 23rd to 45th floors of the 45-storey tower, with luxury hotel JW Marriott Singapore occupying the lower half.
Units at South Beach Residences have still been sold at prices from $3,207 to $3,551 psf over the two months from March to April, according to data from URA REALIS. “Sales at South Beach Residences have been pretty encouraging despite the property cooling measures,” notes C&W’s Li.
View from a unit at South Beach Residences, where units have been sold for as high as $3,950 psf (Credit: Samuel Isaac Chua/EdgeProp Singapore)
GuocoLand could well position the residences at Midtown Bay as a luxury project similar to its 181-unit Wallich Residence, which sits on top of Guoco Tower at its $3.4 billion integrated development, Tanjong Pagar Centre.
According to GuocoLand’s Cheng, the residences at Midtown Bay will have “spectacular views” of Marina Bay, Kallang Basin and Orchard Road. “We will take advantage of these views,” he says. “We hope that Guoco Midtown will be a game-changer,” adds Cheng. “We want to redesign street life, city living and Grade-A office space in the Beach Road district.”
Meanwhile, Golden Mile Complex, designed in the 1960s and completed in 1973, was relaunched for collective sale with a price tag of $800 million at the end of March with Edmund Tie & Co as the marketing agent. The tender closed on April 25 with no bids.
Golden Mile Complex was put up for collective sale a second time last month at a price tag of $800 million (Credit: Edmund Tie & Co)
While the main 16-storey tower with its stepped façade is to be retained, URA has indicated that intensification of the existing development to a total GFA of 925,677 sq ft with a plot ratio of 6.387 can be considered.
In the long term, it is likely to be redeveloped into another landmark integrated development with office, retail, hotel, serviced apartments and residences. For now, as an industry veteran remarks, Golden Mile Complex will remain “a golden o
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