Parking lot shortage problems in the Central Business District (CBD) could worsen: Capitaland announced that it was considering a redevelopment of the Golden Shoe Carpark into office space.
(The parking lot shortage in the Central Business District might worsen. Image courtesy of Thinkstock.)
This is not the first time Capitaland converting a carpark to a building with a higher yield. The developer is currently turning the former Market Street Carpark into an environmentally conscious office building called CapitaGreen.
Its group president and chief executive Liew Mun Leong commented that the company had always harboured an intention to redevelop both carparks. “In 1996, when I was already [chief executive], we already had plans for both carparks. We need the approval of the Government […] and then we have to see the timing of the demand for office space,” he told The Straits Times.
However, a more pressing issue has emerged. With the limited space available in the concentrated district, there already exists a shortage of parking lots for CBD workers.
Motorists will not most probably be displeased should the redevelopment of the Golden Shoe Carpark (which has 1,053 parking lots) take place, especially since the Land Transport Authority introduced its minimum parking requirement for every building. The minimum parking depends on the building’s type of use as well as gross floor area (GFA).
While developers have a free hand at determining how to use their GFA, many prefer to provide the minimum number of parking lots required and use the space for commercial use. The result: massive office buildings with tiny carparks.
This pattern is unlikely to change soon; for CapitaGreen, Capitaland will allocated space equivalent to about 180 parking spots for the estimated 6,000 to 7,000 workers that will be in the building.
CapitaGreen will be a 40-storey Grade A office tower with a net lettable area of around 700,000 sq ft. It is also set to become one of the greenest in the CBD, with environmentally friendly facilities like a rooftop ‘sky forest’, larger windows that allow more natural light in, as well as a cool void for fresh air to circulate through the building’s core.
According to the Capitaland, these features will enable the building to save up to 30% of energy. The developer expects rents ranging from $12 to $14 per sq ft (psf). Current rates are estimated to be just under $9 psf, but construction is only due to complete late 2014.
CBRE executive director of office service Moray Armstrong told The Straits Times that the project’s three-year lead time will help its pricey leasing plan. While immediate office leasing demand looks set to slow, Armstrong explained that it typically takes the two to three years for a turnaround in rents to happen.
He added, “[The project] is likely to come on line at a time that we expect the market to turn and there will be a strong economic resurgence in Singapore. The market has traditionally delivered that and there's no reason to suspect that will change for this cycle.”
Meanwhile, Liew added that the Golden Shoe Carpark had potential for more office space and a larger floor plate than CapitaGreen.
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Related Categories: Market Reports, Non-Residential
Tags: CapitaGreen, CapitaLand, car parks, CBD, Central Business District, commercial space, Golden Shoe Carpark, limited land, Market Street Carpark, non-residential space, office rent, office space, parking lots, Singapore commercial property market
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