Renewal in Singapore’s CBD; new housing options in the offing

By Hailey Yu

/ EdgeProp Singapore |

August 25, 2022 6:27 PM SGT

Renewal is taking place in the CBD with the URA having received 12 outline applications under the CBD Incentive Scheme (CBDI), of which eight have been given in-principle approval as at April 5, 2022

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SINGAPORE (EDGEPROP) - Renewal is taking place in Singapore’s existing CBD, especially in the Tanjong Pagar district. The extension of the CBD to the Beach Road-Bugis area has led to a wave of redevelopments and new mixed-use developments coming up in the area. With Marina Bay now established as the new downtown, the government has set its sights on developing the southeast — Marina South, Marina East and Straits View — as part of URA’s Long-Term Plan Review.

URA’s plan is to develop Marina South, Marina East and Straits View into “an attractive live-work-play environment, integrated with efficient transport and quality infrastructure”. And it is capitalising on the city-state’s key assets — “waterbodies and greenery” — to do so.

The development of Marina South, Marina East and Straits View will support the seamless growth of the city as part of the Greater Southern Waterfront, says Desmond Sim, CEO of Edmund Tie. “The government’s plan is to make the CBD a great place to live, work and play,” adds Sim, who was speaking on the plans for the CBD as part of EdgeProp Singapore’s NDP Master Plan Master Class webinar series on Aug 20.

The Marina South precinct is situated next to Gardens by the Bay and overlooks the Marina Reserve and Straits of Singapore. Sitting on a 45ha site, Marina South has the potential to yield over 10,000 dwelling units, supported by office, retail, hotel and other amenities.

Sitting on a 45ha site, Marina South has the potential to yield over 10,000 dwelling units, supported by office, retail, hotel and other amenities (Photo: Samuel Isaac Chua/EdgeProp Singapore)

First residential site in Marina South

The first residential development site in Marina South was released as part of the 2H2022 Government Land Sales (GLS) programme. Located at Marina Gardens Lane, the 12,300 sq m (132,397 sq ft) site, with a plot ratio of 5.6, can yield about 795 residential units and a 750 sq m (8,073 sq ft) commercial space on the first level. The 99-year leasehold site is expected to be launched for sale in December 2022.

URA’s plan is to have more homes in the CBD, and for people to live closer to their workplace, as well as the lifestyle and recreation amenities in the city area. “The Marina Gardens Lane site is predominantly residential,” says Sim. “It’s part of the overall plan to introduce more work, live, play components in the CBD.” Depending on the take-up of this first GLS site by developers, more sites in Marina South are likely to be released in the future, he adds.

To encourage the development of more mixed-use schemes with a wide range of complementary uses to support a live-in population in the CBD, the URA introduced the CBD Incentive Scheme with bonus plot ratio for developers as part of the Master Plan 2019. It is part of URA’s plan to create “a round-the-clock vibrant commercial district”. URA also introduced the Strategic Development Incentive Scheme to encourage redevelopment of older buildings in strategic areas.

The CBD Incentive Scheme can allow higher plot ratios of 25% to 30% for eligible office blocks built more than two decades ago and are converted into mixed-use developments. As at April 5, URA has received 12 outline applications under the CBD Incentive Scheme, of which eight have been given in-principle approval. Meanwhile, URA has received and given in-principle approval for four outline applications under the Strategic Development Incentive Scheme.

Maxwell House will be redeveloped into a new mixed-use development with about 330 residential units and a 46,000 sq ft commercial podium

Upcoming mixed-use developments with residences

There are four new mixed-use developments in the pipeline for launch next year. One of them is the redevelopment of Maxwell House by a consortium comprising Chip Eng Seng Corp, SingHaiyi and Chuan Investments. The consortium purchased the site en bloc for $276.8 million in May 2021. The new development is estimated to have 80% residential and 20% commercial space, which means a new high-rise tower with 330 condominium units and 46,000 sq ft of retail space, according to Chip Eng Seng.

Meanwhile, City Developments has announced plans to redevelop its freehold Fuji Xerox Towers into a new mixed-use development with residences, serviced apartments and offices, called NewPort Residences, NewPort Plaza and NewPort Tower. The 246-unit NewPort Residences is expected to be launched sometime in 1H2023.

The former Fuji Xerox Towers will be a new mixed-use development with residential, serviced apartments and offices, called NewPort Residences, NewPort Plaza and NewPort Tower respectively

Alibaba and a consortium led by Perennial Holdings have also received in-principle approval for the redevelopment of the former AXA Tower at 8 Shenton Way. The new 63-storey tower will have office, hospitality and residential components.

Tower received in-principle approval under the CBDI scheme for redevelopment into a 63-storey tower with residences, office and hotel.

The biggest upcoming residential project in the area will be at IOI Properties’ new development at Marina View. The 84,110 sq ft site has the potential to yield 905 residential units and 540 hotel rooms. IOI Properties was the sole bidder for the 99-year leasehold, GLS site when it was launched for sale in June last year. The site was purchased for $1.508 billion.

The Marina View site purchased by IOI Properties for $1.508 billion can be developed into a new 905 unit residential project with a 540-key hotel

In the Tanjong Pagar area stands the tallest tower in Singapore, the 290m Guoco Tower, which is integrated with the Tanjong Pagar MRT Station. Crowning Guoco Tower is the 181-unit luxury residences, Wallich Residence, spanning the 39th to 64th floors. Completed in 2017, the highest psf price achieved at Wallich Residence was for the sale of a 3,509 sq ft, four-bedroom unit on the 61st floor, at $17.5 million or $4,987 psf. Average price of units sold at Wallich Residence is $3,420 psf, based on caveats lodged with URA Realis to date.

A recent project launched nearby is One Bernam, a mixed-use development with 351 residential units and a 15,726 sq ft commercial podium. It is also within a five-minute walk of the Tanjong Pagar MRT Station. The project was launched in May last year by joint-venture partners MCC Land and Hao Yuan Investments. To date, 35% of the units have been sold at an average price of $2,470 psf.

Accommodating flexible work options

While the average household size in Singapore has shrunk, that has not corresponded with a desire for smaller homes. The smaller households are a result of smaller family size, singles seeking to live on their own and empty nesters, says Sim.

Instead, there is a preference for more space stemming from people working from home. “Our living spaces and environment must also cater to other future trends, such as an ageing population, flexible work arrangements, e-commerce, smart technology and climate change,” according to Sim. “If the population continues to grow at a constant rate, we will need more homes going forward.”

CBD Rents and Vacancy Rate (Source: Edmund Tie Research)

Besides residences, office space will have to change to accommodate flexible work arrangements. According to URA, 38% of those surveyed would like to have a flexible work arrangement for more than half the time. Another 53% prefer to work closer to home, with a commute that is within two MRT stations, while 12% prefer to work in the City Centre.

Despite the development of regional centres in Woodlands, Paya Lebar, Tampines, and Jurong Lake District as a second CBD, “the City Centre will continue to remain vital to anchoring Singapore as an international business and financial hub”, notes Sim.

CBD Residential Resale Values (Source: Edmund Tie Research)

The City Centre is currently undergoing a transformation to introduce more prime office space, a live-in population, a wide range of complementary amenities and greater accessibility via the MRT network. This will contribute to the CBD and the City Centre becoming “a round-the-clock vibrant commercial district for work, live and play”, says Sim.

“On the back of improving occupancy and rental rates for Grade-A office buildings in the CBD, capital values have also increased,” he adds.

URA is also exploring offering a variety of leases for some sites to support fast-changing needs and facilitate future rejuvenation efforts in selected areas. “Having some sites with shorter tenures would also enable our land uses to be refreshed in shorter cycles,” according to Sim.

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