Demand for office buildings outside the central area is low Analysis: The Jurong Lake District Convention Center area presents limited opportunities | Lianhe Zaobao

Despite the government's efforts to promote a decentralization strategy for office buildings over the years, significant results have not been achieved. Many office tenants still prefer to choose locations in the Central Business District (CBD). Analysts point out that this will affect the attractiveness of the recently launched Town Hall Link site in the Jurong Lake District, with a lower likelihood of the site being selected. The Urban Redevelopment Authority announced on Monday (March 16) that a white site in the Jurong Lake District has been launched under the reserve list, which is expected to drive the next phase of development in the area and introduce new office buildings, residential, and retail spaces. According to the information, the site covers an area of 3.7 hectares, with a plot ratio of 5.0, allowing for a total built-up area of approximately 186,139 square meters. Among this, the office space must reach at least 40,000 square meters. According to the rules, since this site belongs to the reserve list, interested developers must first indicate their interest in the site. The government will then evaluate the proposed prices from the developers before deciding whether to include the site in the confirmed list for market release. Huttons CEO Yip Yoon Ming pointed out that the current conflicts in the Middle East may impact the global and Singaporean economies. In this situation, office tenants may remain cautious. He also stated, "The decentralization strategy implemented by the government over the years has not achieved significant results. Many office tenants still prefer to choose central locations." Further Reading Prime office rents in the city are expected to rise by 5% this year, JLL lists local office buildings as investment favorites Prime office rents in the Central Business District may start at 4% to 7% in 2026 Data shows that last year, the demand for office space outside the central area decreased by 54,000 square meters, with the vacancy rate reaching 14.9%, the highest level since the first quarter of 2023. Ye Runming predicts that this location is unlikely to be developed soon. Huang Xiuying, research and content director at PropNex, shares a similar view. She believes that even if developers are interested in the location near the Victoria Concert Hall, they may not initiate development quickly, but rather wait for the impact of the situation in the Middle East on the global economy and market sentiment to become clearer. The government had launched three plots of land covering 6.5 hectares in the Jurong Lake area under the Government Land Sales plan in the second half of 2023, but they were ultimately left unsold due to low bids. The Ministry of National Development later split it into smaller, more easily developed plots. The authorities also took on part of the infrastructure construction. However, Huang Xiuying pointed out that the development costs for this location are still quite considerable. With a maximum built-up area of about 2 million square feet, this means the land cost could exceed SGD 1.8 billion. "Given the huge capital investment, we expect developers interested in competing for this plot may choose to collaborate on the development."