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RESEARCH

Master Developer Approach and Enterprise District: Implications of the greater flexibility in land use

The Government is introducing greater flexibility in land use so as to accommodate the diversifying space requirements of the innovation economy. The Government will be piloting the Enterprise District concept at . Additionally, it is introducing the Master Developer approach to develop districts based on land use and gross plot ratio.

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Executive Summary W H I T E PAPER

National Development Minister Implications Lawrence Wong announced in Parliament on 7 Mar, 2017 that the Government will pilot a new Enterprise District concept in Punggol as ▪ New Enterprise District Concept part of its push to create new growth centres all in Punggol may lead to pick up in over the island. prices of residential properties in Punggol Additionally, the Government also plans to introduce the Master Developer approach in other new residential and mixed-use districts. ▪ Masterplan approach: Gives the The approach will be applied to the developer more flexibility, development of the new Kampong Bugis integrate uses better and place- residential precinct, and the whole site will be make tendered to a single developer. ▪ Kampong Bugis, together with What are the implications? other catalytic developments, around the fringe are a natural extension of the CBD when economy picks up

This report reviews the implications of the Enterprise District and the Master Developer Approach and Kampong Bugis.

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1 Greater flexibility in land use

Need of flexibility of land use Examples from other cities

As the manufacturing sector moves towards King’s Cross (United Kingdom) Industry 4.0, the line separating between services and manufacturing becomes blur. In The development of the King’s Cross Railway the private market, more industrial buildings are Lands was done by the Master Developer looking more like office developments, as the approach. The King’s Cross Railway Lands manufacturing sector leverages on cloud covers 27 ha and had been in the ownership technology and automation to compete of a number of transport-connected effectively. landowners. The landowners, which formed the King’s Cross Partnership, appointed The emerging trend in working environments Argent as the Master Developer to develop also necessitate the need for greater flexibility the site. The centrepiece of the development to encourage collaboration and innovation. was the development of a new facility for Larger multinational corporations are seeking to Central St Martin’s, which combines two of locate their entire workforce under one roof to London’s most prestigious art schools. The encourage knowledge spillover, interactions establishment of the college played a critical and innovations. A case in point is Google, role in attracting TMT occupiers to the with its campus at Mapletree Business City. development.

The competition of talent also motivates the The leasing activity took off with Google need for flexibility of land use. Highly trained setting up its headquarters there. Office rents professionals in computing and programing are have risen strongly, reaching GBP807.30/ critical in the innovation economy, and they are SGD1,744.82 per sq m (GBP75/ SGD162.10 attracted to locations that offer better per sq ft) in 2016, up from GBD618.92/ accessibility and amenities. With less SGD1,337.67 per sq m (GBP57.50/ constraints, the master developer can create an SGD124.27 per sq ft) at the end of 2013. environment that better meet the needs of the fast-changing environment. Island East (Hong Kong)

What is the Master Developer Island East Economic Hub was developed by Approach? Swire Properties, which redeveloped the area into a commercial zone with the completion of the first Grade A office building, Warwick With the flexibility to put forward proposals in House in 1979. Over the years, Swire the form of a master plan and urban design Properties developed the mixed plan within a broad set of planning parameters, residential/retail/office/hotel developments at the Master Developer will master plan the area Taikoo Shing. Not only were high technology to achieve the vision and development and design corporations the major tenant outcomes of the precinct or district. groups of office buildings in the economic hub, they also drew some international companies from the CBD. One Island East, the latest Grade A office skyscraper completed in the economic hub in 2008, housed tenants such as JP Morgan, Citibank and Ernst & Young.

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The Enterprise District

What is it? Implications Punggol North will be designated as an With the success of Launchpad under its belt, “enterprise district”, home to digital and cyber JTC has the necessary experience to create a security industries. JTC corporation will be dynamic environment similar to . appointed to develop the district to support the The presence of the STI campus is critical to evolving economic and manufacturing the success of the development of the area. It landscape. will also generate spillovers and kick start the North Coast Innovation Corridor. Instead of the current zoning approach which stipulates land use and density for individual With more job opportunities and retail sites, the Enterprise District sets a district-level offerings, prices and rents of the residential Gross Floor Area (GFA) quantum control for properties in Punggol and are likely each land use. Each land parcel will be allocated to improve when the Enterprise District is up its own combination of different uses by a master and running. According to HDB, the median developer. resale price of a four-room HDB flat in the area is $445,000, which is substantially lower Figure 1: Guidelines under the Enterprise District compared to the median price of a 4-room HDB flat in Queenstown at $700,000. There is high capital appreciation potential in the long term if the Enterprise District successfully becomes the next one-north.

Notwithstanding, the success of the Enterprise District may draw growth from other upcoming or established growth clusters, if there are some overlap in the sectors targeted. The development is likely to take at least 5 to 10 years, using the growth of one-north as an Source: URA example.

Figure 2: Artist’s Impression of Enterprise District

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Master Developer Approach on The rejuvenation of the area will also Kampong Bugis help boost rents of the residential properties in the area, which have been resilient given its A Master Developer will be chosen to develop proximity to CBD. the Kampong Bugis precinct, which has a land area of around 17.4 hectares and is bounded by Figure 3: Rent (per sq ft) of residential , and Crawford properties in Kallang Planning Area Street. With a potential yield of 4,000 units, the precinct is envisaged to incorporate active $ per sq ft mobility and car-lite objectives, community 6 building and sustainability. 5

4 The development of Kampong Bugis, together with other developments, will rejuvenate the 3 area. This includes the possible redevelopment 2 of . The proposal is likely 1 to spur sales and appreciation in price for the 0

developments. Notwithstanding, the scope for

Q4 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q2 2008 Q3 2008 Q4 2009 Q1 2010 Q2 2010 Q3 2011 Q4 2011 Q1 2012 Q2 2013 Q3 2013 Q4 2013 Q1 2015 Q2 2015 Q4 2016 capital appreciation is limited as prices are Q1 2008 already high. The current unit price of residential Median Rent 25th Percentile Rent 75th Percentile Rent developments is about $836 to $2,025 per sq ft (Table 1). Implications of Master Developer Approach The Master Developer will have greater Table 1: Existing and Upcoming Developments in flexibility to integrate different uses and will the Kallang Area have more opportunities to come up with innovative solutions and designs to achieve Minimum Maximum Units better integration between buildings and Price Price sold in public spaces, connectivity and amenities. ($ per sq ($ per sq 2016 ft) ft) If well-executed, Kampong Bugis will be like Sturdee 1,390 1,799 209 King Cross in United Kingdom - a vibrant Residences commercial centre that attracts multinational Fulcrum 1,251 2,327 38 corporations and aspiring start-ups in the Forte 1,285 2,025 35 financial, telecommunication, media and Suites Costa Rhu 876 1,368 32 technology sectors. Additionally, the City Square 1,252 1,718 26 development, together with the catalytic Residences projects in Beach Road/Ophir corridor and Citylights 1,172 1,662 24 , will be the natural extension of Water 1,044 1,312 21 the CBD as ’s economy expands. Place Source: URA, Edmund Tie & Company Research

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