WITH the Tanjong Pagar Centre scheduled to complete by mid-2016, GuocoLand is ramping up its marketing efforts for the office and retail components of the mixed development with an official launch on Wednesday. It has decided to "go heavy" on F&B for the 100,000 sq ft of net nettable retail space, which the developer believes that along with a spacious green lung in the form of a 150,000 sq ft landscaped Urban Park, could draw crowds even on weekends.
GuocoLand (Singapore) managing director Cheng Hsing Yao said: "We will bring fresh concepts and destination F&B outlets into Tanjong Pagar Centre to build upon the exciting food culture that is already there and help catalyse the making of the district into a national food haven."
Excluding the space to be taken up by a gym, the F&B offerings ranging from fast gourmet to signature dining restaurants could take up 70 per cent of the retail space.
The Grade-A office (Guoco Tower), retail and Urban Park are part of the iconic 1.7 million sq ft integrated development, which will also house the 5-star hotel Clermont Singapore with 222 rooms and 181 luxury residences - all connected to the Tanjong Pagar MRT station.
When completed, the mixed-use project will be Singapore's tallest building, with the residential units taking up the highest floors. JLL, the sole marketing agent for the commercial space, said that while it is early days to set asking rents for Guoco Tower, the projected growth in CBD office rents in the next one year amid limited supply will bode well for Guoco Tower. Prime CBD office rents currently range from S$10.60 to S$12.90 per square foot per month based on the JLL index that tracks a basket of properties.
Christopher Fossick, JLL managing director for Singapore and South-east Asia, noted that the net absorption of CBD office space per year is about one million sq ft. From 2015 to 2018, the new supply in the CBD is estimated to be 4 million sq ft. "By the time Guoco Tower is ready to be occupied, we could have occupancies at 97 per cent in the CBD area, which is above historical average," he said. "Guoco Tower is a prime building in the CBD, so the owner would expect to lease out at market rents."
Mr Cheng noted that there is a market "equilibrium of supply and demand" over the next four years, notwithstanding the concentration of new office supply in 2016 and 2017. "Our development will be one of the first to come onstream... so to us, we are working hard but we are not overly concerned," he added.
GuocoLand has started talking to potential tenants from diverse industries ranging from technology, social media, insurance and finance to lease out the 890,000 sq ft of net lettable office area. "There has been a lot of interest. We are going to see a more diverse range of tenants coming into the CBD," Mr Cheng said.
The large column-free floor plates of 27,000 to 30,000 sq ft provide tenants with great flexibility in configuring work spaces, he added.
While financial institutions are no longer in aggressive mode of expansion, there are still some that are undertaking "moderate expansion", he observed. "There are also more Asian companies looking to expand in Singapore."
Mr Fossick noted that with the creation of a common market for Asean this year, more companies are adopting a strategy for the Asean region and Singapore is a natural choice to locate their regional headquarters.
In particular, technology and social media companies are increasingly keen in the Asean market. They are also looking for a prestigious address as a way to compete for talent. "We see expansion of existing businesses and we also see new businesses coming in as new opportunities arise," he said. His team is working closely with JLL offices in San Francisco, Los Angeles and London where the financial technology industry is growing rapidly.
"We are trying to get to talk to these occupiers at an early stage as they look to expand in this region," Mr Fossick said.
Meanwhile, GuocoLand has sold only 15 units at Clermont Residence, the project's residential component, at prices above S$3,000 psf. This 181-unit luxury project was launched in late 2013, a few months after the lending curb known as TDSR (total debt servicing ratio) was implemented. Mr Cheng said GuocoLand has not fixed the launch date yet for its 1,024-unit Sims Urban Oasis condo project at Aljunied.
Source: Business Times, 5 Feb 2015