Singaporean developer Ascendas-Singbridge broke ground on the redevelopment of a 500,000 square foot (46,500 square metre) office project in the city’s central business district on Friday, together with partners Mitsui & Co and Tokyo Tatemono Co.
The joint Singaporean-Japanese effort is redeveloping the former CPF building at 79 Robinson Road to create a sustainable, grade A office tower connected to the city’s Tanjong Pagar MRT station, according to a statement from Ascendas-Singbridge.
The overhaul of the 46-storey, circa 1976 structure comes as many market analysts believe grade A office rents in the city, which slid 6.8 percent last year according to research by property consultancy Colliers International, are close to bottoming out.
Green Workplaces for Downtown Singapore
Targetting a mid-2020 move-in date for future occupiers, the redeveloped 180-metre tall building expects to welcome its future tenants to the developer’s first downtown tower asset in its home city.
“This project is a new milestone for Ascendas-Singbridge as we mark our foray into Singapore’s CBD with our first office tower,” Miguel Ko, chief executive officer for Ascendas-Singbridge group said at the ceremony. Ko, whose company is best known as a developer of business parks and suburban offices, added that, “When completed, the new 79 Robinson Road development will inject a fresh supply of innovative, quality work spaces that will cater to the evolving needs of a new generation of business owners and talents.”
Ascendas-Singbridge, Mitsui and Tokyo Tatemono won the tender for the redevelopment effort in 2015 and expect to begin demolition work on the existing building this month.
A major element of the redevelopment will be reducing the current number of floors by 37 percent, taking the building to 29 levels, which allows for higher ceiling heights and maximises natural light across the structure’s 21,000 to 23,000 square foot floor plates.
A Building for a Car-Lite City
Singapore has set the goal of quadrupling the use of cycling for transportation as part of its push to build a “car-lite” city, and the Robinson Road redevelopment aims to fit into Prime Minister Lee Hsien Loong’s Sustainable Singapore Blueprint by providing facilities for non-auto-bound commuters.
When reopened, the building will feature secured “end-of-trip-facilities” for bicycles and personal mobility devices, along with supporting amenities such as shower and locker rooms. In addition to its connection to the Tanjung Pagar station, which is one stop south of the Raffles Place interchange, the development is close to the planned Shenton Way station on the Thomson-East Coast Line, which expects to begin operation starting in 2019.
US-based Gensler, which collaborated with local architecture firm DCA Architects to conceptualise the development, is promising a modern workplace that caters to users’ changing needs and requirements, while achieving the Green Mark Platinum award, the highest mark for eco-friendly buildings awarded by Singapore’s Building & Construction Authority. When completed, the tower will also include F&B facilities, according to Ascendas-Singbridge’s statement.
Getting Ready for a Rebound
Ascendas-Singbridge and its partners are breaking ground in a market where rents and asset values declined in 2016, however, the outlook is expected to brighten by the time the project is completed.
The impending opening later this year of the first of two office towers totalling 1.88 million square feet in the Marina One project helped push Singapore office rents down in 2016. That trend is expected to reach an end soon, as the outlook for future openings declines and the southeast Asian financial hub’s economy continues to grow.
“Post 2018, we believe the steady supply could enable a slow recovery in rents, so long as new international demand picks back up in 2017 and onwards,” Colliers International said in its most recent report on the city’s grade A office market. The consultancy added that, “Given upward pressure on interest rates, we see limited scope for cap rate compression, but prime office capital values could remain firm on scarcity and Singapore remains attractive as a global financial centre.”
The expected shift in the market may have triggered other transactions near the CPF building, with CLSA Capital Partners having acquired the former Singapore Airlines building, just next door at 77 Robinson Road, last November for S$530.8 million.