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SINGAPORE, June 24 — Whether or not the Jurong Lake District can be successfully redeveloped into a vibrant, second central business district (CBD) would hinge on businesses’ willingness to move there, given its distance from the main commercial centre, said real estate analysts.
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This, in turn, would depend on the attractiveness of the rent there, as well as the ability of developers to play to the existing strengths of the area, such as its ready catchment of residents and talent pool, among other factors.
Industry experts were sharing their views with TODAY after the Urban Redevelopment Authority (URA) on Thursday (June 22) launched a master developer site next to Jurong East measuring 6.5 hectares.
Located within the wider Jurong Lake District — long envisioned to be the largest business district outside the CBD — the site is the second of such sites to be launched under the master developer approach after the Marina Bay Financial Centre (MBFC), and about twice its size.
Analysts spoke to TODAY about what it would take to realise the vision of making Jurong Singapore’s next commercial centre.
Relocation required
Senior director for research at Huttons Group Lee Sze Teck said: “In all decentralisation projects, the question is always which companies will relocate.”
This is a considerable challenge given that there would be about 146,000 sqm of office space — almost half of the space at MBFC — to fill up when the newly launched site is developed in 10 to 15 years.
Lam Chern Woon, head of research and consulting at Edmund Tie, said: “For the commercial space, the success would be hinged on whether the rents are attractive enough to entice businesses from mainstream downtown locations”.
Justin Quek, deputy chief executive officer of Orange Tee & Tie, said that distance from the airport — located at the other end of Singapore — “may be a consideration for some global headquarters”, too.
Nonetheless, Tay Huey Ying, head of research and consultancy at investment management company JLL, is confident that the district will be successful in the long term.
Proximity to various attractions, residential areas
Although located much further away from the heart of commerce compared to MBFC — the first site launched under the master developer approach — there are factors that can make Jurong potentially as vibrant as the former, said the experts.
“These include its proximity to research institutions such as the National University of Singapore and Buona Vista, its adjacency to the manufacturing sector, and its expansive population catchment,” said Dr Lee Nai Jia, head of real estate intelligence, data and software solutions at PropertyGuru Group.
Beyond that, Tay noted that Jurong contained “ready ingredients” to become a place of choice for people to live, learn, work and play.
These include the current and upcoming commercial spaces, the existing residential areas, the proximity to six institutes of higher learning and the various attractions there such as the Jurong Lake Garden, among others.
High speed rail not main selling point of Jurong
The 6.5ha of land put up for sale on Thursday is part of a 120ha new precinct to be developed within the Jurong Lake District. This wider area encompasses the site where the train terminal for the now-scrapped High-Speed Rail (HSR) was supposed to be located.
Although it was officially terminated in 2021, the Malaysian government said as recently as May this year that it was keen to revive the project, while Singapore stated its “readiness to study any proposal from Malaysia on how the HSR project can be restarted”.
Most analysts were reticent when asked what the planned 120ha new precinct might signal in relation to the possibility of reviving the HSR idea.
“There is still ample land subjected to further planning in this area, which provides flexibility for the government to re-examine any necessary changes of use along the way,” said Quek of Orange Tee.
However, Quek, along with other analysts, were also quick to reiterate that the HSR was but one part of the entire Jurong Lake District vision.
Alan Cheong, executive director, Sevills Research & Consultancy, said that in any case, developers would base their evaluation of a project on a multitude of factors.
“You’ll make an informed bid based on the merits of the project by itself as it is now,” he said.
“You know you’re not going to put in billions of dollars gambling on whether HSR is going to take off or not.”
Quek pointed out that even with the HSR currently scrapped, Jurong is already “successful today”.
“Looking at how the residential properties have performed in the location over the past few years, as well as the strong crowds at the malls and amenities nearby, there is already a genuine base of demand at this location that can absorb upcoming developments,” he said. ― TODAY
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