Tanjong Pagar Office Rental Growth Outperformed Marina Bay & Raffles Place
SINGAPORE – The Shenton Way / Tanjong Pagar precinct has turned into the biggest commercial hub in the city-state’s central business district (CBD) in the past 5 years, according to a recently published report from Jones Lang LaSalle (JLL).
In fact, the precinct’s vibrancy, critical mass, and office rental growth have outperformed the other parts of the CBD, namely the new downtown area of Marina Bay and the traditional financial district of Raffles Place.
JLL explained that the Shenton Way / Tanjong Pagar precinct has been traditionally viewed as secondary to Raffles Place and Marina Bay, as it housed fewer multinational corporations (MNCs) and it had older buildings constructed on smaller plots of land.
“This has changed in the last 5 years – Office stock in Tanjong Pagar has increased by 27 percent and its critical mass now outstrip both Raffles Place and Marina Bay, making it the largest hub in the CBD,” noted the property consultancy in its report entitled “Tanjong Pagar – Singapore’s fast transforming downtown”.
“The new office developments in the precinct are thoughtfully designed, efficient, well finished, richly landscaped with urban parks and seamlessly connected to transport infrastructure and surrounding developments. These lifted both the quantity and quality of occupiers, residents and visitors to the area, and achieved rents comparable to those located in Raffles Place and Marina Bay.”
New tenants in the Tanjong Pagar precinct over the last 5 years include Microsoft, Uber, TikTok, Palo Alto Networks, and Allianz. Among the new office buildings completed during the said period are Guoco Tower (2016), Frasers Tower (2018), 18 Robinson (2018), and Afro-Asia (2021).
“Over the next decade, new projects and redevelopment schemes will continue to transform the area. We expect prime office buildings to make up 45 percent of Tanjong Pagar’s Grade A office stock in 2027, up from 34 percent currently… This transformation outstrips the developments in Marina Bay and Raffles Place.”
JLL shared that the precinct’s further growth over the next 5-10 years has been set in motion by the government’s CBD Incentive Scheme, an initiative introduced in 2019 that incentivises owners of office buildings in Cecil Street, Anson Road, Shenton Way, Robinson Road, and Tanjong Pagar to redevelop their ageing properties into mixed-use projects.
“New redevelopments are expected over the next few years from AXA Tower (new development expected in 2027), Keppel Towers (c.2024) and Fuji Xerox towers (c.2026). These new developments will contribute to the Grade A office options in the area and add more residential units, hotel rooms, serviced apartments as well as retail spaces to enhance the vibrancy of the locality,” added JLL.