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Thread: Growing business districts

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    Default Growing business districts

    Published July 9, 2007

    THIS WEEK'S TOPIC

    Growing business districts

    Will the move to develop new business hubs in Jurong and Paya Lebar alleviate the pressure in the CBD? Are there other parts of Singapore that should be considered? More generally, what needs to be done to ensure the viability of the new business districts?


    THE government announcement to develop new business hubs is timely. Singapore over the past three years has witnessed tremendous expansion in its financial sector. This growth has been driven to a large degree by the decentralisation of global banking operations to regional hubs, supported by Singapore's overall competitiveness in attracting banks to locate their regional businesses here and strong growth in the banking sector throughout Asia.

    With banks doubling or even trebling the number of people employed in Singapore, there is now a need for them to have long-term, sustainable, real estate solutions. The Urban Redevelopment Authority's move to offer decentralised office space at a cost-competitive level is in line with what the banks seek. This move will ease some of the rental pressure on the CBD and avoid overloading the existing infrastructure.

    Major foreign banks have recently made commitments to decentralised offices such as Comtech in Alexandra and Changi Business Park. Existing planning guidelines in business parks should be flexible to allow non-core financial operations. This will help ensure the viability of these districts and maintain Singapore's regional competitiveness.

    - Chris Fossick
    Managing Director - South East Asia
    Jones Lang LaSalle

    Easing pressure in CBD

    I THINK MNCs should site their offices near their key customers, partners and other stakeholders - wherever these parties are located. Therefore, if a company is in the banking, financial or investment sector, operate from the CBD by all means. But if the company is in, say, the biotechnology or healthcare space, an office in the suburbs might make more sense.

    For example, Baxter assists hospitals, healthcare professionals and patients with the treatment of end-stage renal disease, haemophilia and other medical conditions. We also supply intravenous solutions and other products for hospitals to deliver critical fluids and drugs to patients. In other words, we are constantly in touch with hospitals, healthcare professionals and patients - all located outside the CBD. Our office in Gateway West along Beach Road (where we have been since February this year) is fairly centrally located and allows our staff to travel to hospitals and homes across Singapore relatively quickly.

    Generally, Singapore should continue to develop alternative sites as business hubs, given the current constraints of limited commercial space, high rentals and congested traffic in the CBD. Any potential site must also offer good-quality office space, numerous amenities and well-developed transportation links. The government should also continue with the current practice of demarcating suburban commercial and residential areas clearly, to minimise mutual disruptions in the day-to-day activities of workers and residents.

    - Sanjay Prabhakaran
    Director, South East Asia
    Baxter Healthcare (Asia) Pte Ltd

    THE development of new business hubs will help ease the problem of overcrowding in the CBD and the pressure on office rentals. Reduction in business costs allows companies to achieve better efficiency and Singapore will enjoy a bigger pull factor for foreign investments as a global business hub.

    To further ensure viability of the new business districts, other crucial factors such as the availability of excellent infrastructure and information-communication facilities should also be taken into consideration, as it is important for companies to remain accessible and connected to their relevant stakeholders.

    - Michael Lam
    Managing Director, Asia South
    Compuware Corporation

    THE move to develop new business hubs in Jurong and Paya Lebar will certainly alleviate the pressure in the CBD.

    Over the years, Singaporeans have accepted the idea of working in areas outside the CBD. This has been made possible by our excellent transport infrastructure and a congenial working environment with good amenities in these areas.

    Unlike other cities, thanks to our government's foresight and astute urban planning, our CBD has been spared overcrowding, traffic snarls and pollution. However, as Singapore takes the next step to become a global business centre, it is imperative that more outlying business hubs be developed to cater to the burgeoning new investments and the expansion of current business activities here.

    Given the scarcity of land in the CBD and escalating rentals, it makes sense to let the CBD evolve into a location primarily for head office functions and customer interfacing activities, while backroom operations are located in outlying business hubs, much like the successful Tampines business park.

    Apart from accessibility, costs should be kept low and attractive as a compelling reason for companies to locate some of their operations in the new business hubs. The hubs could also be developed into exciting areas with identities of their own - furnished with good shopping malls, eateries, fitness clubs and entertainment centres, not only to cater to office workers, but also to visitors throughout the day. As we take the next step in our industrial development, we should seize the opportunity to inject more vibrancy and buzz into the environment where we work.

    - Lim Soon Hock
    Managing Director
    Plan-B Icag Pte Ltd

    CURRENTLY, the overriding condition in the CBD is congestion. The development of new business should relieve the pressure in the CBD, but this would be a long-term venture, as shown by the example of Tampines, which took 10 years. The viability of these business districts can be ensured by the inclusion of recreational areas and F&B outlets. Lower costs in these areas will be beneficial to the companies, particularly when contrasted with the rising cost of office space.

    However, the higher real estate costs are here to stay and could unfortunately lead to Singapore losing its edge, and its choice as a high value-added BPO destination. This will, instead, result in making Malaysia a stronger player, following the success of the Multimedia Super Corridor and the launch of the Iskandar Development Region. Nevertheless, alleviating the pressure in the CBD is a forward-thinking move, and should be well-received by people working in the overly congested district.

    - Harish Nim
    CEO
    Emerio Corporation Pte Ltd

    ALTERNATIVE hubs are definitely worth considering. In recent years, one has seen the evolution of Tampines Central from a pure residential zone into a residence, business and recreational destination with good infrastructure, commercial and retail outlets and satellite offices of prominent organisations from the financial services and media industries.

    What has made the CBD so sought after is its location and critical mass of businesses, shopping and entertainment options. This will further intensify as premier Shenton Way real estate development and overhaul of existing facilities approach completion and the integrated resort gets ready.

    While the new hubs might ease the congestion and soaring rentals, they will need to provide suitable alternative value propositions, similar to what the CBD does, to be considered as an alternative. The government's initiative will need to take this into consideration and put in suitable plans to drive this successfully.

    - Deb Dutta
    Vice-President of Asia Pacific/Japan
    Brocade

    NEW business hubs like those proposed in Jurong and Paya Lebar are not new, as there are already regional hubs in Tampines and Jurong East. The new hubs will, of course, alleviate some pressure in the CBD especially for backroom office, administration and support functions. However, large multinationals and financial and legal businesses will still want to maintain their main offices in the CBD for prestige and convenience.

    I feel that the new business districts will not be able to replace the CBD but will act as supplementary business districts. Hence, the smaller multinationals and local corporates might find it attractive to locate there instead of the CBD. To make these new districts viable, the accessibility to MRT and other transport modes must be close to that achieved in the CBD. Further, the rents in these new areas must be substantially lower than the CBD before businesses can be motivated to move.

    - Wee Piew
    CEO
    HG Metal Manufacturing Ltd

    Key ingredients for new hubs

    FOR Jurong and Paya Lebar to take off as alternative business hubs, special efforts must be made by the government and key stakeholders. The fact that offices have not relocated to these areas in sufficiently large numbers thus far suggests that market forces alone - specifically, the lure of lower property prices and less traffic congestion - are not enough.

    The government will have to work with property developers to support the building of iconic commercial properties in these zones, as well as business and hospitality service providers to support their tenants. Statutory boards and government-linked companies could act as anchor tenants to provide critical mass.

    Positioning these zones as alternative hubs for specific industries, one for financial and business services and the other for data centres/IT services, for example, would help them achieve the brand image necessary to attract white-collar employment away from the CBD.

    - Leon Perera
    Group Managing Director
    Spire Research & Consulting Group

    THIS plan can only work if there is sufficient pull in the outlying areas. Businesses will relocate only if the advantages of working in the CBD - namely, a developed transport infrastructure and retail and recreation amenities - are not taken away. The Tampines Regional Centre is an example of this model. The advantage of the area is that it is served by three major expressways, has a huge residential base, and is located close to Changi airport.

    However, there is also the factor of prestige - most businesses would rather have an office in the CBD as it is the centre of business activities. Even offices in Tampines are mostly branches, with their HQ situated in the CBD. This mindset will prove to be the biggest stumbling block, no matter how compelling the lure of cheaper rent and lesser congestion proves to be.

    - Vincent Low
    Regional Director for Southeast Asia
    Netgear

    THE development of new business hubs is good news, to alleviate the pressure on the CBD and to provide companies with an alternative for more affordable office locations.

    For the business hubs to be viable options, however, there must be significant development in infrastructure, to keep the workforce happy.

    Basic and practical services should include efficient transportation, banking, medical, postal and telecommunication as well as cheap and fast lunch options, and other run-of-the-mill amenities such as dry-cleaning, basic toiletries and groceries.

    Secondly, lifestyle and entertainment facilities such as gyms, malls, salons and bars should also be considered. A good variety of food courts and restaurants will certainly attract businesses and residents as well.

    - Charles Reed
    CEO
    interTouch

    NEW business hubs in Jurong and Paya Lebar with amenities and recreation areas would help to provide cheaper office space, and retail outlets - an alternative to the overcrowded Central Business District. They could grow sales of certain popular and luxury brands profitably.

    A new business district requires a dynamic business atmosphere and creative people. It requires landlords to spruce up facades, sidewalks to be tidied up, small-scale industrial and commercial enterprises to turn into luxury residences, developers to bet on the area's appeal, a famous chef setting up a restaurant. There should be a park nearby and night life a short hop away. There should be schools and historical areas and police street patrols to crack down on crime, noise and litter.

    - Tan Kok Leong
    Principal
    TKL Consulting

    I THINK that Singapore has an advantage in that its small size means that any hub will be just as accessible as any other, regardless of geographical location. The key to making them successful depends on the surrounding infrastructure (access, public transport, shops and restaurants, etc) being available. Given that this would increase the number of potential sites available for development, I would really like to see that existing green areas or areas of historical interest are exempted as much as possible.

    - Ross Wilson
    Managing Director, Consumer Products and Services, Apac Region
    Trend Micro (Singapore) Pte Ltd

    ALL great universities, especially those founded on science and technology, spawn businesses and enterprises, often in close proximity to campuses. Jurong was the very first industrial park that set Singapore on the course to industrialisation. The Nanyang Technological University (NTU) is a global top 20 technology university located in Jurong. We welcome the initiatives to develop Jurong as a new business hub for Singapore.

    Besides a coherent ecosystem of businesses, industry, university and residential areas, the presence of the thousands of entrepreneurial students graduating from NTU will inject youthful vitality and innovation into this new ecosystem.

    - Su Guaning
    President
    Nanyang Technological University

    Other hub possibilities

    IT IS an absolute necessity to develop additional business centres in other parts of the country. The areas chosen are right. Jurong is near the Second Link and Paya Lebar is close to the airport terminals. We should have one more, that is Woodlands, next to the Causeway. Malaysia is developing the Iskandar Development Region (IDR), so Singapore should use the areas next to it as the new business centres.

    Making the areas viable is simple: Allow development to comply with the needs of the businessmen in the areas chosen. There are many business centres in Los Angeles which have turned out to be even more popular than the downtown, LA's original business centre.

    - Ng Kong Yeam
    Group Executive Chairman
    Sino-America Tours Corporation Pte Ltd

    WITH escalating office rentals in the heart of Singapore's business district, smaller businesses are beginning to find it hard to stay viable and competitive. The development of alternative business hubs in the suburbs such as Jurong and Paya Lebar is definitely great news for companies with a tighter budget.

    As a rule of thumb, a new business district must have a few key ingredients such as good functional office spaces, great transport infrastructure, food outlets and last but not least, a well-known anchor tenant to ensure its success. In view of the location of the two upcoming integrated resorts, an alternative business hub could be in the Tiong Bahru area. The presence of the MRT and the close proximity to the IRs as well as to the current CBD would make it a good spot for new investors planning to set up office in Singapore.

    - Benjamin Low
    Managing Director, Southeast Asia and India
    Secure Computing

    SINGAPORE has developed successful hubs like Shenton Way (finance), Buona Vista (science and technology), and Tuas and Kaki Bukit (heavy industries), just to name a few. Biopolis is often touted as a mini-city of scientists, like a community exclusively for them. Not only does this promote productivity, it makes it the obvious place for science and technological companies and agencies to reside.

    The success of these areas is due to their focus, clarity and comprehensiveness. The same should be done for Jurong and Paya Lebar. The government should plan and construct the infrastructure of these areas with respect to specific industries so that the relocation of companies will be relevant and logical. More options will be opened up for them and various support industries, subsequently broadening Singapore's spatial usage.

    The CBD is the most sought-after district in Singapore because of its prime location, accessibility and the prestige attached to it. So if the CBD is so great, make it greater - size-wise. There are equally strategic locations like Outram and Lavender that can be developed to the scale and prominence of Raffles Place and City Hall.

    - Annie Yap
    CEO
    The GMP Group

    THE pressure in the CBD would definitely be lessened by the move to develop new business hubs. Besides the two areas mentioned, the areas adjoining Changi Airport could be considered as well.

    In a globalised business world, we are moving into a state of advanced communications. Therefore, besides the cost and response advantage, the environment and ambience of these hubs must be business-friendly.

    The idea of Singapore-style industrial parks has caught on internationally. So, too, the idea of East-West twinning of universities and institutes of higher learning. As such, these new business hubs could be twinned to similar business hubs in other countries.

    The future is one where talent and specialised skills are instantly inter-changeable. In their architectural and engineering designs, the new business hubs could consider another type of inter-changeability - the harmonious interaction (side-by-side) of residence, office and business.

    - R Theyvendran, PBM
    Chairman/Managing Director
    Stamford Media International Group

    THE government's announcement to ease the over-crowding in the CBD is timely, given the current supply crunch and high demand. This pro-active action will certainly attract business leaders from across the globe who may consider setting up office here.

    With regard to the move to develop new business hubs outside the CBD, Tampines Town is a location to be considered as public amenities are mostly in place and this could ideally speed up development time.

    - Sam Yap SG
    Executive Chairman
    Cherie Hearts Group

    Hi-tech solutions

    WITH the rising demand for business space, especially in the CBD, the new business hubs will definitely help to alleviate the pressure. However, we need to look at the bigger picture and develop a long-term solution to ease the congestion.

    Companies can explore ways in which advancements in technology can play a role in empowering employees and increasing mobility without compromising on productivity. Video conferencing, for example, allows employees to conduct meetings with business partners, customers and suppliers - all within the comfort of their organisations or homes. In the long run, this will address the demand versus supply of office space in Singapore more effectively.

    - Lars Ronning
    President, North & South East Asia, India, Australia & New Zealand

    Tandberg

    IN THE current digital economy, most business contacts can be done online or through connectivity solutions such as VoIP calls or video conferencing.

    Businesses need to understand that offices away from the CBD in Singapore can still easily be operationally competitive. In fact, Alcatel-Lucent's office is located in [email protected] Chee, and our newly announced Asia-Pacific IP Transformation Center is planned for Fusionopolis in Buona Vista.

    Subsidies and low rent may initially help attract tenants to the new areas, but it will take a business-friendly infrastructure and a host of supporting industries to cement Paya Lebar and Jurong as choice spots for new business hubs.

    - Oliver Foo
    Managing Director
    Alcatel-Lucent Singapore Pte Ltd

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