Singapore’s existing Central Business District is undergoing an upgrade, with a particular focus on the Tanjong Pagar district. Older buildings in the area from the CBD to Beach Road and Bugis will be redeveloped into mixed-use projects, including residential and hotel components. With Marina Bay becoming the new city center, the government has set its sights on the southeastern region—Marina South, Marina East, and Straits View—incorporating these areas into the Urban Redevelopment Authority’s (URA) long-term plans.
The URA’s plan is to develop Marina South, Marina East, and Straits View into “an attractive live-work-play environment, combining efficient transport and high-quality infrastructure,” leveraging the city-state’s key assets—”waterbodies and greenery”—to achieve this goal.
Leo Kwek, a senior real estate agent at AnjiaSG, stated that the development of Marina South, Marina East, and Straits View will be part of the long-term plan for the Greater Southern Waterfront, ensuring seamless urban development.
“The government plans to make the CBD a great place to live, work, and play,” Mr. Kwek added.
Marina South is located next to Gardens by the Bay, overlooking the Marina Reservoir and the Straits of Singapore. Covering 45 hectares, Marina South will offer over 10,000 residential units in the future, complemented by office, retail, hotel, and other amenities.
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Marina South’s First Residential Site
The first residential development site in Marina South has been released as part of the 2H2022 Government Land Sales (GLS) Programme. The site, located at Marina Gardens Lane, spans 1.23 hectares (132,397 sq ft) with a plot ratio of 5.6, and can yield approximately 795 residential units and 750 sq m (8,073 sq ft) of commercial space on the first floor. This 99-year leasehold site is expected to be launched for sale in December 2022.
The URA plans to build more residences in the CBD, allowing people to live closer to their workplaces and more conveniently enjoy the lifestyle and entertainment facilities of the city area. “The Marina Gardens Lane site is primarily for residential development. This is part of the overall plan to introduce more work, live, and play facilities in the CBD,” explained Leo Kwek. He added, “The first site taken by a developer under the GLS program will set the tone for more sites that may be launched in Marina South in the future.”
To encourage the development of more integrated projects with complementary uses to support the CBD’s residential population, the URA introduced the CBD Incentive Scheme, which offers developers a bonus plot ratio as part of the 2019 Master Plan.
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The URA plans to transform the CBD into a “vibrant 24/7 commercial district.” The URA has also launched the Strategic Development Incentive Scheme to encourage owners of existing commercial buildings across the island to collaborate and redevelop older buildings in strategic areas.
The CBD Incentive Scheme allows for a 25% to 30% increase in the plot ratio of buildings in the CBD, encouraging owners of office buildings constructed over 20 years ago to convert them to residential and hotel uses.
As of April 5, the URA has received 12 outline applications under the CBD Incentive Scheme, of which 8 have been granted in-principle approval (IPA). Concurrently, the URA has received and granted in-principle approval for 4 outline applications under the Strategic Development Incentive Scheme.
Upcoming Mixed-Use Developments with Residential Components
Four new mixed-use developments are set to launch for sale next year. One of them is the redevelopment of Maxwell House, which was successfully bid for by a consortium comprising Chip Eng Seng Corp, SingHaiyi, and Chuan Investments. The consortium purchased the site for S$276.8 million via an en bloc sale in May 2021. According to Chip Eng Seng, the new development is estimated to have an allocation of 80% residential space and 20% commercial space, and will be transformed into a new high-rise tower with 330 condominium units and 46,000 sq ft of retail space.
Meanwhile, City Developments has announced the redevelopment of Fuji Xerox Towers at 80 Anson Road, the first residential project to receive the Platinum Super Low Energy award. This freehold site will be redeveloped into a new mixed-use development comprising residential, serviced apartments, and office spaces, named NewPort Residences, NewPort Plaza, and NewPort Tower. The 246-unit NewPort Residences is expected to launch for sale in the first quarter of 2023.
Alibaba Group and a consortium led by Perennial Holdings have also received in-principle approval to redevelop the building at 8 Shenton Way, formerly known as AXA Tower. The new 63-storey tower will be an integrated building containing offices, a hotel, and residences.
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The largest upcoming residential project in the area will be IOI Properties’ new development at Marina View. This 84,110 sq ft site, when completed, can provide 905 residential units and 540 hotel rooms. IOI Properties was the sole bidder for this 99-year leasehold site under the GLS program, which was sold last June. The developer bid S$1.508 billion, just S$101 higher than the application bid for the site, which translates to a land price of S$1,379 per square foot per plot ratio.
In the Tanjong Pagar area stands Singapore’s tallest tower, the 290-meter Guoco Tower, an integrated development above Tanjong Pagar MRT Station. Wallich Residence is the crowning jewel of Guoco Tower, a collection of 181 luxury skyscraper apartments located from the 39th to the 64th floors. Completed in 2017, the highest-priced unit sold was a 3,509 sq ft four-bedroom unit on the 61st floor for S$17.5 million, or S$4,987 psf. According to caveats lodged with the URA, the average transaction price for Wallich Residence is S$3,420 psf.
A recent launch in the vicinity is One Bernam, a mixed-use development with 351 residential units and a 15,726 sq ft commercial podium. It is also a five-minute walk from Tanjong Pagar MRT station. This project was jointly developed by MCC Land and Hao Yuan Investment and launched in May last year. To date, 35% of the units have been sold at an average price of S$2,470 psf.
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More Flexible Work Options
Although the average household size in Singapore has shrunk, it does not mean the market is craving smaller homes. Leo Kwek believes that smaller houses are the result of a combination of smaller family sizes, single individuals seeking independent living, and the needs of empty-nesters.
On the other hand, people are increasingly seeking larger spaces due to working from home.
“Our living spaces and environments must also cater to other future trends, such as an aging population, flexible work arrangements, e-commerce, smart technology, and climate change,” said Leo Kwek. “If the population continues to grow at a constant rate, we will need more houses.”
In addition to residences, office spaces must also change to accommodate flexible work arrangements. According to URA data, 38% of respondents want flexible work arrangements for more than half of their time. Another 53% prefer to work close to home, with a commute of within two MRT stops, while 12% prefer to work in the city center.
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Although Woodlands, Paya Lebar, Tampines, and Jurong Lake District are developing into second CBDs, “the City Centre continues to play a vital role in consolidating Singapore’s position as an international business and financial hub,” Mr. Kwek pointed out.
The city center is currently undergoing a transformation to introduce more quality office spaces, a larger residential population, comprehensive amenities, and more convenient transport through the MRT network. This will help the CBD and the city center become “a vibrant 24/7 commercial district for work, life, and entertainment,” said Leo Kwek.
“Against the backdrop of increased occupancy and rents for Grade A office buildings in the CBD, capital values have also increased,” he added.
The URA is also exploring offering various lease options for some sites to meet rapidly changing needs and to facilitate rejuvenation efforts in specific areas in the future.
“Some land with shorter usage periods can also allow our land use to be renewed in shorter cycles,” said Leo Kwek.
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