Expansion of business park will position Singapore for recovery
THE economic outlook is all gloom but the Government is already positioning Singapore for the next upturn by unveiling plans to beef up the supply of business park space in Jurong.
Its ambitious move comes even as demand in the property sector has fallen dramatically in recent months while office rents have dipped.
Industrial landlord JTC Corporation said yesterday it will develop 5ha south of the existing International Business Park. This will yield 125,000 sq m, or about 1.35 million sq ft, of rentable space.
The development will help JTC 'secure investments and anchor key companies' in an effort to better place the economy for the next upturn, it said.
Site surveys will start next month and infrastructure work, including improvements to the park's road networks, will begin in March. Two new road linkages to the Ayer Rajah Expressway and Pan-Island Expressway will be created.
Companies can lease space in the business park from 2011, said JTC.
Market watchers told The Straits Times that the Government is stimulating economic activity with the development while also seeking to avoid the kind of office space crunch that has hit businesses in recent years.
The economic boom that preceded the financial crisis saw prime office rents double to almost $19 per sq ft last year. This sparked a scramble to build more office space, including government moves to release transitional office sites to relieve pent-up demand.
While this has now led to concerns that Singapore could face an office space glut over the next two years, some analysts feel that early preparation of sites enables the market to respond faster when the economy does pick up.
Colliers International's research and advisory director, Ms Tay Huey Ying, said she did not think there would be a glut, and that this 'will help in ensuring a U-shape recovery instead of a V-shape one when the global economy recovers'.
CIMB-GK economist Song Seng Wun said government investment in public infrastructure like Jurong Island or Changi Airport during downturns has traditionally 'worked well for Singapore'.
Even though the impact on economic output 'will not be massive', such work will benefit local firms, added Mr Song.
The International Business Park - 21 land parcels of about 25ha - is Singapore's first such park. Established in 1992, it has drawn renowned tech firms such as Dell and Acer to set up shop.
JTC said a review of the park's masterplan was timely as the Urban Redevelopment Authority had recently announced a dramatic makeover for Jurong in its 2008 Masterplan.
The industrial town is to be redeveloped into Jurong Lake District - a 360ha mini metropolis of homes, hotels, shops, eateries and offices linked to the MRT via walkways and waterways.
It will consist of Jurong Gateway, the up-and-coming commercial hub of the West, and Lakeside, which is being developed as a destination for young families, with tourist attractions and parks complemented by water activities.
JTC said 'there is potential' for synergy between the expanded business park and the rejuvenated Jurong Gateway.
Collier's Ms Tay agreed that more business park space will add critical mass and 'aid in the realisation of the Government's vision for the Jurong Lake District'.
To complement the commercial developments, the surrounding housing estates will be rejuvenated by various statutory boards. This will mean upgrades to Teban and Pandan Gardens and the Faber Terrace areas in the next few years.
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