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Thread: Government to release more sites for office use to meet demand

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    Default Government to release more sites for office use to meet demand

    Government to release more sites for office use to meet demand

    By Noor Mohd Aziz, Channel NewsAsia | Posted: 30 March 2007 1935 hrs


    SINGAPORE: The government is set to release more sites for office use through its land sales programme to meet increasing demand.

    Besides land sales, National Development Minister Mah Bow Tan said the government would also consider releasing existing sites.

    And this includes freeing up vacated government office sites in the city area.

    In land-scarce Singapore, releasing space for office use requires careful planning.

    To meet the growing demand, the Central Boulevard and Beach Road sites have been released.

    The National Development Minister said if those sites are not enough, more downtown sites would be put up for sale.

    And if there is still a need for space after that, the government will consider providing "transition office space".

    Mr Mah said: "I think all of these moves will deal not just with the immediate problem but also with the longer term issue of supply and demand.

    "Rest assured that there is sufficient space for expansion of the commercial sector and the office sector in the longer run. But we need to deal with the immediate term as well and this is what I want to emphasise."

    He was speaking to reporters after the groundbreaking ceremony for a new bridge at Marina Bay.

    The bridge will be built at a cost of S$90 million (US$59 million).

    When completed in 2009, it will be open to vehicles and pedestrians who will enjoy a 3.5km walking route around the bay.

    Mr Mah said: "I think the bridge groundbreaking ceremony that we have today is another significant development in the series of development that we are seeing around the bay.

    "We already have the flyer; we've the IR (Integrated Resort), BFC (Business and Financial Centre), the Sail and Collyer Quay. So the bridge is, in a way, starting to tie up all these developments together and when it is completed, it will physically tie everybody together."

    The bridge is part of the government's S$2 billion (US$1.3 billion) investment in infrastructure to develop the area.

    To make Marina Bay more vibrant, a series of sporting events will be held there every year.


    - CNA/so

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    Default Govt moves to deal with CBD office space crunch

    Published March 31, 2007

    Govt moves to deal with CBD office space crunch

    Pace of govt land sales in the area is likely to be quickened, says Mah Bow Tan

    By ARTHUR SIM


    (SINGAPORE) The government will move to tackle the office space crunch in the Central Business District, National Development Minister Mah Bow Tan said yesterday.

    Acknowledging an 'imbalance' between supply and demand, he said the authorities will likely step up the pace of government land sales (GLS) in the CBD. 'I think the quantum will have to be stepped up as we see a tightening up of supply,' Mr Mah said.

    The government has also set an ambitious target for further development of Marina Bay and the new downtown, which Mr Mah said could begin from as early as 2009.

    To deal with the immediate office space crunch, the government is considering releasing state land for short-term use, he said.

    The Urban Redevelopment Authority confirmed later that it is exploring whether vacant sites can be used for 'transient offices'.

    'They would be basic but proper office accommodation that can be constructed quickly - for example, one year - and would be on land on short tenures,' a spokesman said. 'This is still under study and we have not firmed up the details yet.'

    Mr Mah, speaking yesterday at the ground-breaking ceremony for a new bridge that will span the mouth of Marina Bay, painted broad strokes of how the rest of Marina Bay will take shape.

    The first site to be released - a white site with an office space requirement, on Central Boulevard - will be launched for sale in May, he said.

    Another key site is the stretch between the upcoming Marina Bay Sands and Marina Bay Financial Centre. Mr Mah said this choice plot will complete the loop of developments around Marina Bay when completed, but it will only be available when other construction work ends around 2009.

    Other sites that will then come on stream will extend from Marina Bay and wrap around the Garden at Marina South.

    The existing CBD will also be extended southwards into what is being called the Central sub-zone.

    The as-yet-unnamed bridge, which will cost $82.9 million, will provide direct road access between Marina Centre and the new Bayfront at Marina South.

    Mr Mah said that the bridge is part of $2 billion to be spent on infrastructure developments there, including the critical common services tunnel. 'In turn, we have attracted about $10 billion of investments to date,' he said.

    Land likely to be released for development this year includes a boutique hotel site next to the Marina Bay Sands, the international cruise terminal site and the central promontory site. All are likely to go through a Request for Concept stage.

    Mr Mah said he wants to reassure the business community that office space will be made available. State buildings vacated by the government could be an immediate source, he said. 'It may not be used for MNC head offices, but it can certainly be used for back-end office for financial institutions.'

    The government has moved some of its offices out of the CBD but Mr Mah said there are 'one or two' left.

    He also said the authorities will 'encourage' users to make better use of existing sites, but did not elaborate on whether the government will make it more attractive for owners of old office buildings to redevelop them.

    With the pace of construction likely to be maintained or stepped-up, Mr Mah reiterated that sand supplies are not a concern because the authorities are finding new sources.

    He said the supply and price of sand will not affect the building of the integrated resorts, and he does not expect any delay to the opening dates.

    Mr Mah did, however, say the government is close to finalising details on how it will help contractors involved with government contracts who face cash flow problems because of higher construction costs. The government said earlier it would pay for 75 per cent of the additional costs for public-sector contractors.

    Details are expected within the month, Mr Mah said. 'In principle, we will make progress payments. If we can help contractors with cash flow payments, we will do so.'


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    Default Imbalance seen in CBD space supply, demand

    Published March 31, 2007

    Imbalance seen in CBD space supply, demand

    Rents in S'pore rise 65%, highest of all 134 locations in DTZ's global survey

    By ARTHUR SIM


    (SINGAPORE) The redevelopment and regeneration of the Central Business District (CBD) is well under way, but it may not be happening fast enough.

    According to a report by DTZ Debenham Tie Leung, average annual take-up of office space has been 1.8 million square feet for the last 10 years. Yet, the property firm notes that potential supply for 2007 is estimated at 612,000 sq ft.

    In 2008 and 2009, supply will dip below 500,000 sq ft and will only pick up in 2010 to 2.15 million sq ft.

    And already, the repercussions are being felt.

    In its Global Office Occupancy Costs Survey 2007, DTZ shows that rents in Singapore rose 65 per cent year on year, the highest increase across all 134 locations surveyed, to US$7,860 per workstation per year.

    As a result, Singapore climbed 41 places on DTZ's survey list to 55th spot globally, and was up six places to ninth position in the Asia-Pacific region.

    There does appear to be an imbalance of supply and demand, and as DTZ executive director Ong Choon Fah says: 'The government can programme development.'

    For Mrs Ong, the pace of redevelopment in the CBD could have been faster but as she also points out: 'Crystal ball-gazing is not easy.'

    'It's a combination of planning and market forces,' she added.

    Perhaps one of the best examples of this paradox is One Raffles Quay (ORQ).

    A consortium of Keppel Land, Cheung Kong Holdings and Hongkong Land bought the site in March 2001 for $462 million, or $290 per square foot per plot ratio (psf ppr), at a time when, as Mrs Ong remembers, the property market was 'very bad'. Indeed, the site had previously been offered for sale in 1997 and there were no takers. The expected price of between $600 million and $800 million was also not achieved.

    Mrs Ong says that the acquisition was seen as 'contrarian' at the time. But ORQ is now fully leased and achieving top rents, spurring redevelopment and a rash of acquisitions by foreign funds of buildings, most recently Temasek Tower.

    Also contrarian was City Developments Ltd (CDL), which in 2002 bought the site for its hugely successful The Sail @ Marina Bay for $227.10 psf ppr - 22 per cent lower than the price paid for neighbouring ORQ.

    Looking back, CDL group general manager Chia Ngiang Hong said: 'CDL purchased the white site which is now being developed into The Sail at a time when no other developer was willing to venture into building a residential development at Marina Bay.'

    CDL is now redeveloping One Shenton (the former Robina House) into a high-end condominium with a retail component, and has also expressed interest in the UIC Building next door, which is for sale at about $830 million or $1,150 psf ppr (inclusive of development charge and lease top-up).

    Developers now appear to be making up for lost time, and demand for development sites is high.

    'Older buildings are often strategically located in prime areas that render them ideal for redevelopment. As such, although the older buildings purchased via en bloc acquisitions are not immediately available due to longer lead time required for planning process, their conversion may yield better returns,' Mr Chia said.

    The spate of current redevelopments, including the government land sales site at Collyer Quay and Overseas Union House, can be attributed to the 'programming of development' by the Urban Redevelopment Authority (URA).

    Some, like the redevelopment of Natwest Centre into a condominium called The Clift by Far East Organization, was prompted by a URA initiative to bring more critical mass into an otherwise quiet downtown at night.

    Plot ratio incentives are also important.

    A spokesman for the URA said: 'A number of existing office buildings in the CBD, in particular in the Shenton Way and Cecil Street areas, have not yet maximised their full development potential under the current Master Plan 2003.'

    The pace of redevelopment has certainly picked up since 2003. Keppel Land is the latest to take advantage of the Master Plan and will soon announce plans for the redevelopment of Ocean Building.

    'There are merits in redeveloping Ocean Building and these include the opportunity to add about 100,000 sq ft of gross floor area which has not been utilised,' a spokesman for Keppel Land said.

    'Furthermore, it will become increasingly challenging for the building, which is about 33 years old, to attract and retain top-quality tenants. By redeveloping Ocean Building we will be able to effectively maximise the potential of the site.'

    Mrs Ong for one welcomes the government's initiatives to address the issue of supply in the CBD, including the release of more development sites. She says that it is important to maintain the current 'momentum of development', not least because it allows the older parts of the CBD to regenerate.

    She notes: 'In the 1970s, when the government started releasing sites in Shenton Way, it stimulated the regeneration of the old Raffles Place.'

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