Resurgence of Mixed-Use

Developments in Singapores CBD

December 2014

Introduction

Mixed-use developments are nothing new globally, but they have seen
somewhat of a resurgence in Singapore over the last few years. The
Singapore Central Business District (CBD) has been undergoing a
transformation since the early 2000s with the governments push to
encourage city living and ensure that the CBD remains lively during
both the evenings and the weekends. Historically, the CBD has
been dominated by pure office buildings plus a number of hotels and
supporting retail amenities.
A new push on city living started in the mid-2000s with residential
developments such as The Sail @ Marina Bay, which is located in
the heart of the CBD in Marina Bay. The CBD today is punctuated by
various non-office use developments. Residential apartments have
sprouted up all over the CBD, from Tanjong Pagar to Beach Road,
and a number of new hotels managed by international chains have
emerged in the city, either in the form of new buildings or revamped
and reused existing buildings.

2 White Paper | 2014

The transformation efforts were initiated by the Singapore authorities

with the goal to turn the growing CBD into a vibrant district round
the clock by encouraging a mix of uses commercial, residential,
hotel and entertainment. This vision of a more vibrant CBD was in
reaction to a global trend of extending the activity in the CBD beyond
the standard office hours, and to recoup the large investment in
infrastructure that has gone into developing the area.
This transformation would not have been possible if not for two key
enablers.

Flexible Planning
Development

Year Completed / Due

Office
Component

Hotel / Serviced
Apartment Component

Retail
Component

Residential
Component

Raffles City

1985

Yes

Yes

Yes

Suntec

1994

Yes

UE Square

1997

Yes

MBFC

2010/12

Yes

Asia Square

2011/13

Yes

Yes

Yes

South Beach

2014

Yes

Yes

Yes

Yes

Duo

2016

Yes

Yes

Yes

Yes

Marina One

2016

Yes

Yes

Yes

Tanjong Pagar Centre

2016

Yes

Yes

Yes

Yes

OUE Downtown

1994
(refurbishment expected to be
completed in 2016)

Yes

Yes

Yes

Yes
Yes

Convention
Centre

Yes

Yes

Yes

Yes

Yes

The key planning initiative that has driven this is the concept of white
site zoning. The concept of white sites was first introduced by the
Urban Redevelopment Authority (URA) in 1995 to give developers
more flexibility in planning the composition of land use on certain land
parcels sold by the state through the Government Land Sales (GLS)
programme. Under the URAs white site guidelines, developers can
decide on the mix of uses and the respective quantum of floor space
of each use as long as the total permissible gross floor area (GFA)
for the whole development is not exceeded. Some sites also include
a minimum fixed percentage of the development to be dedicated to a
use decided by the government, which is often an office space in the
CBD and the rest is up to the developer. Some recent GLS plots have
also had a percentage stipulated for hotel use. The flexibility of land
use given to a white site allows developers to develop schemes that
respond best to changing market conditions. Developers therefore
have a stronger chance of matching demand and supply. White sites
can generally include commercial (office and retail), residential or hotel
use, or a mix of these uses. This also means that from an investor/
developers point of view, a mix of asset classes also serves to
spread the risk and mitigate a particular usage being in a down cycle.
Many developers also use the presale of any residential component
to offset the upfront costs and improve the cash flow for the entire
development.

Artist impression of Guoco Tower a mixed development by Guoco Land

Resurgence of Mixed-Use Developments in Singapores CBD 3

Artist impression of South Beach a mixed development by CDL

The result of this planning has been the successful emergence of

mixed-use developments that bring life to the CBD beyond normal
business hours. Mixed-use developments have proved to be very
appealing to users across many global cities. Pacific Place in Hong
Kong originally comprised three hotels (the Shangri-La, Marriott
and Conrad), two office towers and a shopping centre when it was
developed back in the late 1980s. The development has always
enjoyed high occupancy rates as users enjoy the convenience of
having multiple amenities located under one roof. From an office
occupiers viewpoint, a hotel and strong retail offering provide
excellent convenience to staff and visiting clients. The hotels and retail
in turn benefit from the patronage of the office occupiers. On the back
of its success, this development has since been further enhanced
with the addition of another hotel (The Upper House) and a third office
tower.

4 White Paper | 2014

Successful developments in Singapore include Raffles City, which was

completed in the mid-1980s and comprises an office tower, two hotels
(Swisstel The Stamford and the Fairmont Singapore) and a retail
mall. Despite the growing presence of newer office developments
in the CBD, Raffles City Tower has consistently maintained high
occupancy rates.
More recently, Asia Square (2 million sq ft of office space, The
Westin Singapore hotel and more than 60,000 sq ft of retail space)
has become the first Grade A office development in the CBD to
encompass a 5-star hotel within the building. There are a number of
notable new schemes in the pipeline, including South Beach (500,000
sq ft of office space, a hotel, luxury residences and retail space) and
the Tanjong Pagar Centre, which includes a 900,000 sq ft office tower
(Guoco Tower), a hotel, luxury residences and retail space.

Scale Economies and Accessibility

Another key factor to the success of these mixed-use developments

is scale economies and transportation links (subway access). Besides
a more productive use of space, mixed-use developments also bring
about land use synergies. Combining multiple uses within a single
development allows developers to share common resources within
the overall development, lowering development costs and maximising
the use of the land. A steady flow of foot traffic, drawn from residential
occupants, hotel guests and office tenants, also serves to create
buzz within the development throughout the day and night. The cross
selling of services and amenities to stakeholders within the same
development also builds up a small community, acting as a win-win
and further encouraging a timeefficient productive community. While
retailers benefit from a stable catchment of shoppers, the occupiers
likewise gain from the convenience of having retail right on the
doorstep.

For office tenants, the diverse mix of offerings within mixed-use

developments undoubtedly raises the appeal of office space to
their staff. Besides the doorstep convenience offered by the retail
component, the presence of hotels and residential units within the
same development provides an added benefit for office workers and
visiting guests and reduces overall travelling time.
The efficient connectivity of the development to other parts of the city
through integration with the public transit system offering the occupier
alternatives other than relying on private automobiles makes such
a project highly efficient and functional. The transport connectivity
improves not only the accessibility for the occupiers, but also enlarges
the market catchment for the entire project, especially retail.

Resurgence of Mixed-Use Developments in Singapores CBD 5

The Future is Mixed

On the back of ever-growing concerns over environmental
sustainability and labour productivity, we envisage more mixeduse development. While there is still very much value in single use
schemes, given the popularity of mixed-use developments with
occupiers and therefore investors, we will see further developments of

6 White Paper | 2014

this kind in the future, which will continue to add to the vibrancy of the
CBD. Certain areas such as Marina Bay, given its greenfield nature,
need to be carefully orchestrated to ensure that supporting amenities
are sufficient, and mixeduse schemes prove very effective in this
regard.

About JLL
JLL (NYSE: JLL) is a professional services and investment
management firm offering specialized real estate services to clients
seeking increased value by owning, occupying and investing in real
estate. With annual fee revenue of $4.0 billion and gross revenue of
$4.5 billion, JLL has more than 200 corporate offices, operates in 75
countries and has a global workforce of approximately 53,000. On
behalf of its clients, the firm provides management and real estate
outsourcing services for a property portfolio of 3.0 billion square
feet, or 280.0 million square meters, and completed $99.0 billion in
sales, acquisitions and finance transactions in 2013. Its investment
management business, LaSalle Investment Management, has
$53.0 billion of real estate assets under management. JLL is the
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Incorporated. For further information, visit www.jll.com.
JLL has over 50 years of experience in Asia Pacific, with over 27,500
employees operating in 80 offices in 15 countries across the region.
The firm was named Best Property Consultancy in seven Asia Pacific
countries at the International Property Awards Asia Pacific 2014, and
won nine Asia Pacific awards in the Euromoney Real Estate Awards
2013. www.ap.jll.com

About the authors

Chris Archibold
Head of Markets, JLL
chris.archibold@ap.jll.com
+65 6494 3750
Chris Archibold International Director at JLL and is Head of Markets
in Singapore. He is responsible for the delivery of transactional and
advisory services to our clients in Singapore. Chris is also a member
of the Asia Pacific Markets Executive Committee. Chris is a Fellow
of the Royal Institution of Chartered Surveyors (FRICS) with over 20
years experience of advising both occupier clients and developer/
investor clients principally in Asia Pacific and in EMEA (Europe Middle
East & Africa).

Dr Chua Yang Liang

Head of Research, South-East Asia
yangliang.chua@ap.jll.com
+65 6494 3721
Dr Chua Yang Liang, Head of Research, Jones Lang LaSalle, SouthEast Asia leads the Jones Lang LaSalle research teams in the SouthEast Asia region, encompassing Indonesia, Malaysia, the Philippines,
Singapore, Thailand and Vietnam. Trained as an urban planner, Dr
Chua brings to the Firm a different perspective to the fundamental
research on the property market. He publishes original research on
regular property market updates, rental and price indices, topical
property market matters, as well as consultancy assignments.

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2014 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.