GuocoLand project to revamp Tanjong Pagar

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Feb 24, 2011
GuocoLand project to revamp Tanjong Pagar

$3.2b project linked to MRT will have offices, shops, apartments, hotel
By Esther Teo, Property Reporter

GUOCOLAND'S confidence in the property market prompted it to pay $1.7 billion for a site in Tanjong Pagar that it plans to turn into a major commercial, hotel and residential development.

The Singapore-listed developer will build at least one million sq ft of Grade A office space, a five-star hotel, shops and apartments - all linked to the MRT station via a basement.

The project could have around 78 storeys and rank alongside Republic Plaza, UOB Plaza and the OUB Centre in Raffles Place as one of the tallest buildings in Singapore.

The project will cost about $3.2 billion - including the land cost - and it will be completed in 2015 or 2016.

GuocoLand chairman Sat Pal Khattar said at a signing ceremony yesterday that the firm's tendered price of $1.7 billion - or $1,006 per sq ft per plot ratio - shows its confidence in the market.

He noted that office rents have already recovered by about 25 per cent from the lows of 2008.

'This is not an easy site, it's not a cheap site, so we continue to believe there will be a good market for offices, and for the hotel and residential (as well),' he said.

Mrs Trina Loh, group managing director of GuocoLand (Singapore), also noted that 60 per cent of the office space going on stream until 2015 has been pre-committed.

Mr Khattar said that over time, the area of the site will be able to compete with the new financial hub in Marina Bay, given its proximity to The Treasury, the Monetary Authority of Singapore and the expansion of the Central Business District (CBD) in Tanjong Pagar.

'The cultural and heritage and residential component of the low-rise, you won't find that in the Marina Centre. That's a different kind of centre, whereas we are part of the heart of Singapore,' he added.

The development will be designed by American firm Skidmore, Owings & Merrill, which counts the Time Warner Centre in New York and Changi Airport's Terminal Three among its projects.

The site's residential component will be 'nearer to the maximum allowed', said Mr Khattar, and it is expected to be launched next year with a good mix of apartment sizes.

'That's the component that you can sell and it's important that there must be some cash flow also from (the project),' he added.

Mr Moray Armstrong, executive director of office services at CB Richard Ellis, said the timing of the development is favourable.

'The supply of new prime CBD office tails off significantly post 2013 and 2014, and GuocoLand will likely be able to capitalise on a strengthening market,' he said.

'The integration of office space with a hotel, residential and supporting retail directly linked to the MRT will prove a highly attractive proposition to office tenants.'
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