Area to be increased by 20%; some parts to see plot ratios raised
The economy may be slowing but the government has already set its sights on riding the recovery. To meet future demand for space, JTC Corporation plans to expand the International Business Park (IBP) in Jurong by 20 per cent and will raise plot ratios for some areas in the park.
For the future: An artist's impression of the expanded International Business Park. JTC will be adding five parcels or around 5 hectares of land along the IBP's southern boundary. With a plot ratio of 2.5, this will generate some 125,000 sq m of new business park space.Property consultants generally welcomed the news and believe that the new supply, which will enter the market only in the mid to long term, will have little impact on the weakening property market.
First established in 1992, the IBP now consists of 21 land parcels spanning 25 hectares, and JTC has fully allocated these plots. The park is home to several global technology firms such as Creative Technology, Acer and Dell.
'We are expecting a surge in demand for business park land in this area in the next economic upturn, which land intensification on existing IBP land alone would not be able to address,' said a JTC spokesman yesterday.
To prepare 'land supply in advance to meet investors' needs, we are planning to develop land parcels adjacent to the IBP for its expansion'.
JTC will be adding five parcels or around five hectares of land along the IBP's southern boundary. With a plot ratio of 2.5, this will generate some 125,000 square metres of new business park space.
JTC has also been receiving requests from existing IBP lessees to intensify land use. The overall occupancy rate for multi-tenanted buildings at the park has been high, at around 90 per cent.
To meet these needs, plot ratios for around 14.8 hectares of land will be increased from 1.4 to 2.5.
In line with the redevelopment, the government is looking to improve the area's road network by creating two road linkages to direct traffic from the IBP to the Ayer Rajah Expressway and the Pan Island Expressway.
It could take another 3-4 years for the IBP's revamp to be completed, estimates JTC. The redevelopment will complement the Urban Redevelopment Authority's (URA) 2008 Master Plan to create a suburban commercial hub in Jurong.
'There is potential to create synergy between the IBP and the proposed developments in Jurong Gateway, the commercial precinct of the Jurong Lake District,' said the JTC spokesman.
JTC's announcement comes amid a cooling economy and a softening property market - consultants are predicting a fall in demand for industrial space and rents in the coming year. But some whom BT spoke to remain sanguine about prospects for the extra IBP space coming up.
'Business park space is still a good alternative for those looking at office space outside the Central Business District (CBD). As long as rentals in the CBD are considered high, interest in business parks will be healthy,' said Knight Frank's head of industrial business space, Lim Kien Kim. 'I don't think this new supply will significantly affect rents for business parks in general.'
According to its website, JTC charges a land rent of around $60.57 per square metre (psm) per annum, or a land price of $913 psm on a 30-year lease for IBP sites with a plot ratio of 2.5.
DTZ's executive director Ong Choon Fah also believes that the new IBP supply will not pose a big concern. 'This is long-term . . . There will always be market cycles, so we must not lose sight of the long- term goals . . . Announcing this now also allows market players to be aware of what is happening in the future, so they can start to plan.'
Cushman & Wakefield Singapore managing director Donald Han says that the new IBP plots could also be put on the reserve list if they are released in a subdued market. Reserve list sites are launched for tender only upon successful application by a developer with an undertaking of a minimum bid acceptable to the state.
'I don't think (the government) will force feed the market,' he said.
Alongside JTC's redevelopment plans for the IBP, URA also released other updates to its 2008 Master Plan for the Jurong Lake District yesterday. They include the rejuvenation of Teban Gardens and Pandan Gardens, and road improvement works for Faber Terrace and Faber Hills.
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