The land parcel at Beach Road is a plum CBD fringe commercial site that should generate good interest amongst developers and investors. With 88,313 square metres of GFA, the site can be developed for office use (minimum 61,820 square metres) and retail use (maximum 3,000 square metres), while hotel, service apartment and residential use are also allowed. Conservation of the former Beach Road police station on the site will enhance the character of the development making it more interesting.
The office component would increase the critical mass of new office buildings in the vicinity, together with South Beach Tower and Duo Tower.
The triggering of this site comes in tandem with positive investment sentiments in the office property market and also at a time when office rents appear to be firming after two years of decline. Seven bidders contested keenly for the Central Boulevard site in November 2016 and it would not be surprising if the unsuccessful parties in that tender contest again, for the subject site. If residential use is incorporated in the development, it would coincide with an expected upturn in the residential market.
The development of the subject site augurs well for the office market as it will increase the supply of quality office space in the CBD fringe that is more affordable than those in prime CBD. In the CBD, the potential supply of office space is approximately 18 percent of its investment grade stock while in the CBD fringe, it is less than 2 percent, reflecting the uneven spread of new supply between the two sub-markets. JLL had recently released a white paper on office decentralisation highlighting the need for more office space outside the CBD, especially in the decentralised sub-market to provide more affordable office space options to businesses.