35-storey office, retail space beside Guoco Midtown to be up by 2023
The redevelopment of Shaw Tower was motivated in part by its owner’s hopes that the new building and neighbouring GuocoLand’s Guoco Midtown on Beach Road will be up around the same time, as part of the rejuvenation of the Ophir-Rochor corridor.
To that end, the 42 year-old Shaw Tower will likely be torn down and a new 35-storey grade A office and retail building completed in its place by 2023. Some 150 tenants have been given advance notice to relocate elsewhere on or before June 30, 2020.
“Now is an opportune time to redevelop because Guoco Midtown is due to be completed by mid 2022. We thought it best to try to synchronise our construction with theirs to minimise noise and disruption in the area, and also to ensure that both buildings will be up around the same time,” Shaw Towers Realty general manager Daney Lim told The Sunday Times.
He said the owners are looking at the option of topping up the building’s 99-year lease. “But even if we can just build a new building and have it for 50-plus years, that’s good enough,” he said.
About $10 million of rental revenue from Shaw Tower, which is held by the Sir Run Run Shaw Charitable Trust, is given each year to a foundation in Hong Kong that in turn distributes the funds to charities that help schools and hospitals.
In response to queries from The Sunday Times, GuocoLand Singapore said yesterday it has been in discussion with the owner and architects of Shaw Tower to share its vision and design concept of the integrated project.
Guoco Midtown will comprise 770,000 sq ft of premium grade A office space; 30,000 sq ft of retail and entertainment and more than 200 homes.
The new Shaw Tower will have 400,000 sq ft of office space and 30,000 sq ft of retail space, subject to planning approval.
“We are both very excited about each other’s plans and what the whole area could become. The redevelopment of Shaw Tower will definitely add to redefinition of the Beach Road area into a prime office and residential location,” a GuocoLand spokesman said.
As early as 2016, Shaw Towers Realty had informed tenants informally of plans to redevelop or refurbish the building. A number have expressed interest in leasing at the new building, but some are retiring after June 2020.
“It’s the last leg of the journey for those retiring,” said Mr Lim.
Savills Singapore senior director Alan Cheong noted that the area encompassing Golden Mile Complex, Golden Mile Tower and Jalan Sultan has potential to be rejuvenated.
“The developments there have come of age and once URA awards the Master Developer tender for the Kampong Bugis area, real estate values would be enhanced if the older buildings are redeveloped.
“The rejuvenation of the area may create a new sub-CBD and raise interest among developers for future Government Land Sales sites such as Kampong Bugis. Conservation shophouse values will also be enhanced if more older buildings along Beach Road are redeveloped,” Mr Cheong said.
The presence of anchor mega mixed-use developments helps to set new price ceilings, said Mr Leong Boon Hoe, chief operating officer of List Sotheby’s International Realty.
“For Beach Road, the presence of Duo started the process, which is now continued by South Beach, and soon by Guoco Midtown… Asking rents for office units in Duo are currently around $10 psf, fast catching up with that of grade A offices in Marina Bay and Raffles Place,” he said. In comparison, office rents at Shaw Tower range between $3.50 and $5 psf.
“Beach Road is an example of how urban rejuvenation and renewal enabled new developments to blend with the charms of the conservation areas of Kampong Glam and Haji Lane. This rejuvenation is still going on. Most recently, owners of the 55-year-old Golden Mile Complex announced that the development will be conserved even if it is sold en bloc. It is a matter of time that other older developments in the vicinity such as The Plaza and The Gateway will have to consider refurbishment or redevelopment,” Mr Leong said.
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