AXA Tower, PIL Bldg Redevelopments To Generate More Office Space
SINGAPORE – Contrary to the expectations of some market watchers, the redevelopment of old office buildings within the city-state’s central business district (CBD) may not necessarily result in less office space over the mid- to long-term, reported The Business Times on Monday (15 November, SGT).
For instance, based on the provisional permissions granted by the Urban Redevelopment Authority (URA) in Q3 2021 for the redevelopment of AXA Tower and PIL Building, the upcoming office space in these sites could be comparable or greater than the prior amount.
AXA Tower’s redevelopment will yield 847,808 sq ft of gross floor area (GFA) for office space, 86,187 sq ft of retail space, 268 apartments, and 100 hotel rooms. Based on the news outlet’s rough calculations, the office space could work out to around 678,000 sq ft to 720,000 sq ft of net leasable area (NLA), assuming a building efficiency ratio (ratio of NLA to GFA) of 80 percent to 85 percent. This is near or slightly higher than the project’s existing office NLA of about 680,000 sq ft.
Experts expect Alibaba to eventually occupy most of the workspace in the redeveloped AXA Tower. While the project is undergoing redevelopment, Alibaba’s subsidiaries including Lazada will operate from leased office space in Lazada One at 51 Bras Basah Road.
As for PIL Building, it has been greenlighted to generate 212,888 sq ft GFA of office space and 7,707 sq ft of retail premises. According to the news outlet’s calculations, office NLA translates to approximately 170,000 sq ft to 181,000 sq ft, a far cry from the development’s existing office NLA of 107,000 sq ft.
The Business Times also understood that 2 aforementioned projects have received in-principal approval to upgrade their 99-year leasehold tenure to freehold.
While redevelopments of ageing office blocks won’t necessarily lead to less office space, Edmund Tie’s Research Head Lam Chern Woon said the redevelopments will result in displaced tenants who will seek alternative office space in the near-term.
“We see limited supply pressure from the redevelopment as the new office supply is similar to the volume of stock being removed on the whole,” said Lam, who added that the authorities are clearly shifting away from pure-office uses in Singapore’s CBD by providing incentives for more mixed-use projects.