(SINGAPORE) The Urban Redevelopment Authority (URA) is understood to be reviewing whether a critical mass of office space should be safeguarded in the Central Business District to accommodate Singapore's growth as a financial and business hub.
BT understands the study is part of the Concept Plan 2011 review and market watchers say the outcome may have implications for owners of office blocks seeking to convert their properties to residential or other uses. It may also affect demand for ageing CBD office blocks from investors looking to redevelop them into apartments for sale.
URA is unlikely to come up with a temporary moratorium on the conversion of offices to other uses - as it did in May 2007 to prevent further depletion of existing office stock, BT understands. That ban was lifted in late-October 2008 during the global financial crisis. Instead, the current review is more likely to see certain precincts, streets or streetblocks within the CBD being safeguarded for office use, while conversions to residential uses may continue to be allowed for others locations, suggest property consultants.
URA's spokesperson said: 'A large part of the CBD is zoned for commercial use in Master Plan 2008. Generally, the planning intention is for these sites to be safeguarded primarily for office uses, to support Singapore's growth as a business and financial hub. URA regularly reviews our plans to ensure that this planning objective is met.'
Asked about talk that URA is delaying approving applications to convert CBD offices to other uses, URA's spokesperson said: 'Any application for rezoning and redevelopment for sites within the CBD, like any other land use rezoning proposals, will continue to be evaluated on a case-by- case basis. There is no automatic approval for any site to be rezoned to other uses.'
DTZ executive director (consulting) Ong Choon Fah argues that ensuring sufficient supply of office space in the CBD has to be balanced with a need to inject live-in population in the city.
'Keeping the place vibrant after office hours and on non-work days will help to rejuvenate our city and achieve higher productivity from land,' she said. An analyst said this approach is already being practised by URA, which has allowed developers a mix of uses for large sites sold by the state in the CBD, including the plot next to Tanjong Pagar MRT.
Cushman & Wakefield Singapore vice-chairman Donald Han said: 'Allowing old office blocks to be converted to apartments has played its role as a catalyst in encouraging urban renewal in the old CBD, for instance, in areas with smallish fragmented plots of office blocks. Investors aren't keen on buying these pencil office blocks per se. What's drawing them to such properties is the prospect of redeveloping them to apartments.'
Residential use is lucrative in the financial district. Recently, freehold apartments at Robinson Suites sold like hot cakes at $2,600-3,300 psf. 'A new strata office project instead might have fetched about $2,000 psf on average,' said Mr Han.
Still, URA has much to mull over. One view among analysts is that Raffles Place be kept for pure offices for now, while pockets of apartments may be allowed in the Robinson Road, Cecil Street and Shenton Way areas.
'If a streetblock already includes an office building approved for redevelopment into apartments, then the planners may be willing to allow other office blocks in the same stretch to also be redeveloped to residences. However, if there haven't been any conversions in the streetblock, planners may want to stick to office use along that stretch,' suggests DTZ's senior director (investment advisory) Shaun Poh.
Apart from planning intent, other considerations on allowing conversion of use could include the balance lease tenure and size of these plots, say analysts. For instance, if a particular location has several pencil office blocks on small land plots with remaining lease terms of 60 years or less, the authorities may be more keen to have these sites revert to the state when their leases run out for amalgamation into a bigger land parcel, suggests Mrs Ong.
URA's May 2007 temporary ban on conversion of offices to other uses covered Singapore's Central Area (including the financial district, Beach Road, Singapore River, Orchard, Newton and Outram areas).
Among the conversions approved before the ban were Natwest Centre, 1 Shenton Way, HMC Building and 76 Shenton Way, which have been torn down for redevelopment into The Clift, One Shenton, Lumiere and 76 Shenton - all comprising apartments, with shops on the ground floor.
Conversions approved since the ban's removal include VTB Building (being redeveloped into Robinson Suites); and Aviva Building/Cecil House (approved for a 227-apartment project). Outline planning permission has also been granted to redevelop the freehold Keppel Towers and GE Tower in Tanjong Pagar into a residential project with ground-floor commercial space.
UIC Building has been approved for redevelopment into a 60:40 residential:commercial scheme. The owners of Marina House at 70 Shenton Way have been allowed a 40:60 residential:commercial project.