Tanjong Pagar Centre fills a void

March 2, 2015 2:33 PM SGT

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SINGAPORE: The construction of Tanjong Pagar Centre is well underway, and has now reached the 37th floor of the 38-storey office block called Guoco Tower.

Sitting on top of Guoco Tower will be the 181-unit luxury residential block, Clermont Residence.

This will bring the tower to a height of 64 storeys.

At 290m, it will be the tallest skyscraper in Singapore.

Clermont Residence previewed in December 2013, and 15 units have been sold to date.

They were a mix of one-bedroom units of 646 sq ft and two-bedroom units of 861 sq ft, with prices ranging from $1.94 million ($3,009 psf) to $2.65 million ($3,077 psf).

There was a sole three-bedroom unit of 1,313 sq ft that was sold for $4 million ($3,050 psf).

A relaunch of Clermont Residence is scheduled for later this year, says Cheng Hsing Yao, managing director of Guoco- Land Singapore.

Adjacent to the office and residential tower will be the 20-storey Clermont Hotel with 222 rooms.

There will also be a 100,000 sq ft, six-storey F&B and lifestyle mall, which will be linked underground to the Tanjong Pagar MRT interchange station.

Fronting the mall at street level will be be a new 150,000 sq ft urban park.

The entire $3.2 billion mixeduse scheme will have a total gross floor area of 1.7 million sq ft when completed in mid-2016.

The historic area of Tanjong Pagar, which sits within the CBD, is already undergoing a massive transformation.

Newly completed high-rise residential towers include the 280- unit Altez by Far East Organization and Allgreen Properties’ 360-unit Skysuites @ Anson, which are located adjacent to the 646-unit Icon.

The latter was completed in 2007.

Across the road from GuocoLand’s Tanjong Pagar Centre is Far East Organization’s PS100, with 100 SOHO units and a 27-storey business hotel, Oasia Downtown.

The project is scheduled for completion sometime this year.

Other new hotels in the neighbourhood include Orchid Hotel and Carlton City Hotel, both of which opened in 2013.

The rows of shophouses along Tras Street have also morphed into an F&B destination dotted with high-end restaurants and bars.

In the immediate vicinity, the closest comparable development to Tanjong Pagar Centre’s F&B and lifestyle mall in terms of size is 100 AM (the former Amara Shopping Centre), which opened in November 2012.

The four-level shopping mall has a total lettable area of 127,000 sq ft, with anchor tenants such as NTUC’s Fairprice Finest supermarket and Koufu food court.

Cold Storage supermarket has also opened at Altez.

With two supermarkets in the vicinity, Guoco0 Land’s Cheng reckons there is no need for another one.

“We want to add to the Tanjong Pagar district to make it successful, not to compete [with existing establishments],” he emphasises.

About 70% of the retail space at Tanjong Pagar Centre will therefore be dedicated to F&B outlets.

“The lesson we learnt is that the retail and F&B concept must appeal to the throngs of office workers, but it must also be [a] signature destination to draw people on weeknights and weekends,” adds Cheng.

F&B tenants will therefore need to have “a dual concept” — fast moving items to cater to the lunch crowd, but a more relaxed ambience in the evenings for more leisurely dining, he explains.

The urban park at Tanjong Pagar Centre will also be “bicycle friendly”, with bicycle stations and a bicycle track.

There will also be a 30,000 sq ft “City Room” — a sheltered space with a glass roof, equipped with photovoltaic cells and ceiling fans for alfresco dining or relaxing.

The biggest component of Tanjong Pagar Centre will be its office block with 890,000 sq ft of premium Grade-A space.

The floor plates are large, spanning 27,000 to 30,000 sq ft and column-free.

Prospective tenants are likely to be a mix of financial institutions as well as companies in technology, social media and business services, says Christopher Fossick, JLL’s managing director for Singapore and Southeast Asia.

“There are many financial institutions and business services that are expanding to meet the needs of the growing Asean markets.” JLL is the marketing agent for the retail and office components at Tanjong Pagar Centre.

Prime office rents in the CBD are currently in the $10.60 to $12.90 psf per month range, according to JLL Research.

Guoco Tower’s rents are likely to be “in line with prime CBD rents”, says Fossick.

Meanwhile, average retail rents in the CBD are around $21.50 psf per month, but could range anywhere from $15 to $45 psf per month, says JLL.

There are several large mixed-use schemes in the CBD and its fringe that are scheduled for completion between 2015 and 2017.

They will increase the amount of Grade-A office supply by another four million sq ft.

These include South Beach on Beach Road by City Developments Ltd and IOI Group with 500,000 sq ft of office space, which is scheduled for completion sometime this year; DUO by M+S with 570,000 sq ft of office space is targeted for completion in September 2016; while Marina One by M+S, which has 1.88 million sq ft of office space, is also scheduled for completion in 2016.

Frasers Centrepoint’s Grade-A office development at the junction of Cecil Street and Telok Ayer has 645,000 sq ft of space in the pipeline for completion in 2017.

From 2011 to 2014, annual net absorption of office space averaged about one million sq ft, according to JLL Research.

Meanwhile new supply of office space coming onstream from 2014 to 2018 will amount to some four million sq ft, or an average of one million sq ft a year.

“As take-up for office space is expected to remain strong, there is equilibrium between supply and demand of CBD office space over the coming four years,” says Fossick.

“Tanjong Pagar is also going through a major transition into a prime commercial and entertainment hub.”

Last month, a consortium led by Perennial Real Estate Holdings purchased AXA Tower on Shenton Way for $1.17 billion, which works out to $1,735psf.

Located near Tanjong Pagar Centre, the existing AXA Tower has 675,000 sq ft of net lettable area, and unutilised plot ratio that translates into an additional gross floor area of 212,000 sq ft.

The property is also allowed to have up to 32,000 sq ft of medical suites.

“Tanjong Pagar is very different from other parts of the CBD,” says Cheng.

“There are some 5,600 residential units, 2,000 hotel rooms and more than nine million sq ft of office space within a 500m radius from the Tanjong Pagar MRT station, and [the scale] will increase as our development comes onstream,” he adds.

“But there is a huge void right now at the centre of Tanjong Pagar.

We will fill that void and become the focal point.

And that is why we are called Tanjong Pagar Centre.”

This article appeared in the City & Country of Issue 663 (Feb 9) of The Edge Singapore.

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