Guoco Midtown poised to become Beach Road's new landmark

By
/ EdgeProp Singapore
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April 26, 2019 5:29 PM SGT
Having transformed the Tanjong Pagar neighbourhood with its $3.2 billion Tanjong Pagar Centre integrated development, listed property developer GuocoLand intends to repeat that feat at the junction of Beach Road and Rochor Road with its upcoming Guoco Midtown.
The mixed-use development is situated at the intersection of three key office micro-markets, namely City Hall, Marina Centre and Bugis, says Cheng Hsing Yao, group managing director of GuocoLand Singapore.
Guoco Midtown sits on a 2.1ha, 99-year leasehold site purchased by GuocoLand in a government land sales (GLS) tender for $1.62 billion. The project, scheduled for completion in 2022 with an estimated cost of $2.4 billion, will have a total built-up area of 950,600 sq ft. Offices will make up 770,000 sq ft (81%) of the area; retail and F&B spaces will account for another 32,290 sq ft; while the residential component will have more than 200 units. Public spaces will take up 170,000 sq ft.
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The $2.4 billion Guoco Midtown will have a mix of Grade-A office space, retail and F&B, public space and residences (Picture Credit: GuocoLand)
The development will contain two high-rise towers – the 30-storey Grade-A office tower and 32-storey residential tower called Midtown Bay – and a series of low-rise blocks: a five-storey Network Hub that is connected to the office tower; a three-storey, conserved building that formerly housed the Beach Road Police Station; and a two-storey retail and F&B component.
‘Street level, human-scale’
“In conceptualising the development, we took inspiration from the heritage buildings and conservation shophouses in the surroundings to create a more ‘human-scale’, street feel,” says Cheng.
For a more vibrant streetscape, there will be two distinct “Shop n Dine” clusters with al fresco dining in two sheltered public spaces, the 10,000 sq ft City Room and 10,900 sq ft Market Place. The building for the former Beach Road Police Station will be transformed into F&B and retail spaces on the first level and offices on the upper two floors, which Cheng says “is ideal for companies in the creative industry who want a boutique, quirky office space”.
There are also two internal streets within the development – Ocean Avenue and Seawater Street – so named because the project is built on reclaimed land. The latter can be closed off to create a 60,000 sq ft space for large-scale events that can hold up to 2,000 people.
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The 170,000 sq ft of green spaces comprise 10 gardens and plazas at various levels. Six of the 10 are open to the public, two are reserved for office tenants and the last two are exclusive to residents. “Public spaces have become very important,” says Cheng. “We want to create a garden within the office environment.”
Redefining workspace
The group is not just transforming Beach Road with Guoco Midtown. It also wants to redefine the workspace and the traditional landlord-tenant relationship. With disruption taking place across many sectors, more companies want greater flexibility in terms of workforce and space needs, observes Cheng.
That has led to GuocoLand’s new “core and flex” leasing model for its office space at Guoco Midtown. About 15% of the net lettable area (NLA) within the office space will be dedicated to “flexible and adaptable spaces”. “It is about changing the way we look at office leasing,” says Cheng. “It’s a small but fundamental shift in the way we do business.”
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Part of the 15% includes two floors within the Network Hub that companies can use to set up “innovation laboratories” or experimental start-ups.
Co-working operators have been able to thrive largely because landlords have been “very rigid” with tenancies, he observes. Tenants who want greater space flexibility have therefore moved to co-working spaces.
Thus, GuocoLand is moving towards “a partnership” with its office tenants instead of the traditional landlord-tenant relationship. “It will be a customised approach to cater to our tenants’ future needs,” says Cheng. “The core and flex model allows tenants to expand or contract their teams without having to move or renovate.”
The flex model allows the tenant “to pay for the space they use as and when they need it”, says Valerie Wong, GuocoLand Singapore general manager (commercial). For greater rent stability, however, the core space still makes up 85% of the office space.
Recreational facilities within office space
Another challenge that companies face is attracting and retaining talent. The location of the office and the environment have become very important, notes Cheng. GuocoLand has, therefore, incorporated recreational and hospitality facilities within the office tower.
For instance, on the seventh floor are facilities such as a sky garden, 40m swimming pool, jogging track, a gym and shower facilities. There are also chill-out pavilions, an event plaza and private dining. At the Network Hub are a lounge, MICE (meetings, incentives, conferences and exhibitions) facilities, training facilities and collaborative spaces.
GuocoLand has seen the benefits of having a diverse mix of office tenants at Guoco Tower in Tanjong Pagar Centre, which has 890,000 sq ft of Grade-A office space. A diverse tenant mix will mean greater stability in terms of both occupancy and rental rates.
At Guoco Midtown, the office tower has column-free, efficient floor plates of 27,000 sq ft to 30,000 sq ft. This allows flexibility in terms of sub-division, says GuocoLand’s Wong.
“At Guoco Midtown, there are many design features incorporated within the office tower and the Network Hub that will make the space very efficient,” adds Wong. “Sub-division of floor plates in most conventional office buildings usually results in long corridors and reduced space efficiency due to fire escape provisions.”
‘Setting the pace’
Chris Fossick, JLL CEO of Singapore and Southeast Asia, sees GuocoLand “setting the pace” with its bold new leasing concept and allocation of 15% of the office space within Guoco Midtown for flexible space. “Flexibility is a key factor for corporations considering their office needs,” he adds. “We believe that flexible space could make up to 30% of corporate commercial space globally by 2030.”
As well as flexibility, Guoco Midtown aligns with the trend for mixed-use developments in vibrant areas, notes Fossick. “This approach is likely to pay dividends and attract strong interest from corporate tenants whose employees value convenience and variety of local amenities. [Guoco Midtown] is a timely and forward-thinking development that will meet the changing needs of occupiers.”
The other key component of the integrated development is the Midtown Bay residential tower. “It’s very important to infuse life into a mixed-use project,” says Cheng. “That’s why we have included residences.”
Cheng: The core and flex model allows office tenants to expand or contract their teams without having to move or renovate (Picture Credit: Albert Chua/EdgeProp Singapore)
The average size of units at Midtown Bay is close to 900 sq ft. “We are targeting trendsetters who enjoy being part of a very vibrant, dynamic community,” says Dora Chng, Guoco-Land Singapore general manager (residential).
Guoco Midtown is designed by Melbourne-based, international architectural practice, Denton Corker Marshall, with Singapore-based DP Architects as the project architect.
A transit-oriented development
“The project is designed as a transit-oriented development,” says GuocoLand’s Wong. There’s an MRT exit at street level leading to an air-conditioned underground pedestrian link to the Bugis MRT Interchange Station for the Downtown and East-West Lines.
In the future, there will be overhead bridges to Shaw Towers, which is scheduled for redevelopment. From Shaw Towers, there will be an overhead bridge to South Beach and the Esplanade MRT Station on the Circle Line. From South Beach, commuters can also walk to Suntec City via an overhead pedestrian bridge, which will bring them to Promenade MRT Station, an interchange for both the Downtown and Circle Lines. Vehicular access is from two major roads – Beach Road and Nicoll Highway.
Over the last three years, the office space absorption rate has averaged 1.5 million sq ft per annum, says Moray Armstrong, managing director of CBRE Singapore. The availability of larger office space in the market has tightened markedly with the Grade-A segment having enjoyed particularly strong occupier interest in quality buildings.
“From now through to 2022, Singapore’s office supply pipeline appears commensurate with the expected level of demand,” adds Armstrong. “The completion of Guoco Midtown in 2022 is expected to energise the entire area into a vibrant work-live-play district.”