S$3b project to revive fading CBD

Property developer Guocoland’s latest Tanjong Pagar project (Tanjong Pagar Centre) holds a new promise for the fading business district that has been overshadowed by the brand new Marina Bay area, home to the swanky Marina Bay Financial Centre.

The S$3 billion project will have more than 500,000 square feet of residential space.

It will also have more than one million square feet of office space.

Analysts expect keen investment interest in the project once it’s ready in four to five years.

Guocoland chairman Sat Pal Khattar said the project, which features first-class office and residential buildings, hotels, and leisure facilities, has potential.

“People will live here and work here, and be involved with all the other activities,” Mr Khattar said.

World-renowned architects Skidmore, Owings & Merrill and Architect 6 will design the project, which currently does not have a name.

Guocoland’s 78-storey project will be one of the tallest buildings in the CBD.

It will also house one of the biggest apartment complexes in Tanjong Pagar, at 509,000 square feet.

This is second only to United Industrial Corporation’s 927,000 square feet new development, where 60 per cent or 556,000 square feet of space will be allocated for residential units.

Median rentals for housing units in the area increased 10 per cent in 2010.

And they look set to rise now that Tanjong Pagar is becoming a choice destination to work, live and play.

Cushman & Wakefield vice chairman Donald Han said: “(The residential units) will be proper one-, two- or three-bedroom penthouse units; it might mirror the size of the Sail, for instance.

“Any development which is iconic in nature, located (near an) MRT station, (and) offers excellent views especially on the higher floors will be (sold) fairly well, and we will expect the end pricing to exceed the S$2,000 per square foot mark easily”.

If economic growth remains robust at four to six per cent a year, analysts say occupancy for Guocoland’s project could be between 80 and 100 per cent.

Mr Han said: “If you are looking from now till 2015 or 2016, in line with the new sites that will be triggered or developed by commercial developers, we will probably see a consistent two to 2.5 million square feet on a per annum basis.

“And that’s enough to be… absorbed by the market. So we don’t have any major inequilibrium in terms of the potential supply that will be coming into the market place”.

Office rents in the CBD area rose 16.5 per cent last year.

Analysts said with strong demand from financial services firms, office rents in the CBD are expected to increase further.

Guocoland won the tender for the Tanjong Pagar site, which is also a white site, in November last year.

The site sits on Tanjong Pagar MRT station and was bought for S$1.7 billion dollars, and has a site area of 161,703 square feet and a gross floor area of 1,697,892 square feet.

Guocoland is owned by Malaysian tycoon Quek Leng Chan and its Singapore portfolio includes Sophia Residence and Goodwood Residence.

Source : Channel NewsAsia – 24 Feb 2011

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