AUSTRALIA-LISTED property developer Lendlease is optimistic about appetite for its S$3.2 billion Paya Lebar Quarter urban regeneration mixed-use development, even as the retail sector is softening and outlook for the Singapore economy gets gloomy.
Sharing the plans for the project located at the junction of Paya Lebar Road and Sims Avenue, Lendlease on Monday said the development will comprise seven buildings across a 99-year leasehold site.
The non-strata title site, comprising two land parcels with a total area of 3.9 hectares – roughly the size of eight football fields – was awarded in April 2015 to a joint venture in which Lendlease has a 30 per cent stake. The joint venture had bagged the site with a bullish top bid of S$1.67 billion in the Government Land Sales programme.
The site will have three grade A office towers, two of which will have 14 floors each while Tower 3 has 13 floors.
There will be three residential towers comprising 429 one to three-bedroom units, as well as more than 200 retail shops across six floors plus one entertainment level in the mall.
NTUC FairPrice Finest and Kopitiam have been named the first two anchor tenants at Paya Lebar Quarter mall.
The entire project is expected to be completed in phases with the retail and commercial spaces to be ready in the second half of 2018 and the residential towers in the first half of 2019.
The commercial space comprises 55 per cent of the site in gross floor area, while residential amounts to about 18 per cent, Lendlease said. Of the total retail space, about 30 per cent will be for food and beverage tenants.
The residences are expected to be launched for sale in the first half of next year, it added.
Against the backdrop of a slowing economy and general weak sentiment across several sectors, Richard Paine, managing director of Paya Lebar Quarter, remains optimistic about filling up the office, retail and residential spaces.
“I think we’re upbeat because sites of this scale actually don’t come to market very often… When you have a site that’s of large scale, it has actually the ability to move the market in sub-markets. If you look at Paya Lebar today and you look at the pricing of the assets today and then you look at a very large scale project that comes in, it actually has the ability to rewrite sub-markets,” Mr Paine said, adding that the company has seen that very successfully done on a lot of its urban regeneration projects overseas.
He said he is “bullish” about the residential towers as there has not been many such launches in the area.
As for office towers, the developer is focusing on getting tenants who are “progressive multinational companies focused on the health and well-being of their staff” – something he said the development offers, including lush greenery and the incorporation of a cycling path that connects to the wider Park Connector Network. In particular, office occupants will also have access to end-of-trip-facilities where they can shower and change if they choose to cycle to work.
The Paya Lebar Quarter will be a significant landmark of the Urban Redevelopment Authority’s 12-hectare Paya Lebar Central and is Landlease’s first residential project in Singapore.
Urban regeneration is a key pillar of Lendlease’s strategy and it comprises over 70 per cent of the developer’s S$49.3 billion international development pipeline, Mr Paine said.
Desmond Sim, CBRE Research’s head of Singapore and South-east Asia, noted that demand on the decentralised office front has been relatively stable. Pointing to the occupancy for Guoco Tower, he said it has now filled up to about 80 per cent and will not be surprised if it hits full occupancy rate. Another development – Marina One – now has close to 40 per cent pre-leased, he added.
Paya Lebar Quarter is located in an area with a strong transport node, Mr Sim said, adding that the developer will benefit from being flexible when it comes to tenants’ requirements.
As for residential units, Mr Sim said: “If priced within the sweet spot of S$1 million and below, there’s still demand out there for such units.”
For the retail space, he believes retailers will still demonstrate confidence if the site has good day catchment and is convenient for shoppers.