URA To Temporarily Disallow Conversion of Office Use in the Central Area to Other Uses
The Urban Redevelopment Authority (URA) announced today that it will, with immediate effect, temporarily disallow the conversion of office use in the Central Area to other uses until 31 December 2009. This is to curb further depletion of the existing stock of office space.
This policy will apply to development applications involving redevelopment or major addition & alteration (A&A) works to convert office space to other uses. It will also apply to submitted applications which have not been approved.
Significant increase in office space demand, outstripping new supply
Singapore’s robust economic growth has caused a significant increase in the demand for office space over the last two years. In 2005, office space demand increased by 240,000 sqm (Gross Floor Area - GFA) and in 2006 it increased by another 290,000 sqm (GFA), which was the highest annual increase since 2000. In the first quarter of 2007, office space demand increased by another 105,000 sqm (GFA).
The demand for office space is expected to continue to grow, especially in the Central Area, as Singapore strengthens its position as an international financial and business hub.
Based on URA’s information on the expected completion dates of office projects with planning approvals[1], about 330,000 sqm (GFA) of new office space is expected to be completed between now and end 2009. This new supply will be insufficient to meet the projected increase in demand between now and end 2009.
However, the office space situation is expected to improve in 2010 when further new supply, totalling about 330,000 sqm (GFA) is expected to come on-stream, including 180,000 sqm (GFA) of office space from Phase 1 of the Marina Bay Financial Centre.
Measures to provide additional office supply to meet demand in the short term
To ease the short-term office shortage over the next two to three years, URA and other government agencies, such as the Singapore Land Authority (SLA), are implementing short-term measures to make available some additional office space supply for immediate needs. For example, SLA is making available existing state buildings for lease, such as vacant office buildings, suitable old school buildings and disused community centres.
URA is also identifying sites for the development of transitional offices. Such land parcels will be made available on short-term leases to facilitate the development of low-rise office buildings of about three to four storeys. They can be built quickly in about one year and at relatively low cost. URA will release details on the development of transitional offices separately.
Disallowing conversions of office space to other uses to prevent depletion of the existing office stock
Over the last two years, a few office building owners have started to convert their buildings for residential and other uses. Such conversions immediately remove space from the office stock. Existing businesses from these buildings will be forced to find alternative office space.
The impact of such conversions will be most significant in the Central Area, which is the core commercial area in Singapore where about two-thirds of the total island-wide stock of office space is currently located, and where the demand for office space is strongest.
While the government has taken measures to inject office supply into the market in the short term, the office space shortage will be aggravated if existing office buildings in the Central Area are allowed to be converted to other uses. URA has therefore decided to temporarily disallow the conversion of any space which has been approved for office use to other uses in the Central Area until 31 December 2009. This policy will affect development proposals involving redevelopment or major A&A works to convert office space to other uses. The new policy will apply to all current applications which have not been approved and future applications for such conversions. Property owners who have valid planning approvals in the form of Outline Permission, Provisional Permission, or Written Permission to convert office use to other uses before today, that is 21 May 2007, will not be affected by this policy change and will be allowed to proceed with the conversions as approved.
URA will continue to monitor the office property market closely and will review this policy at the end of 2009, taking into consideration the conditions in the office property market at that time.
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Notes
[1] Includes Government Land Sales sites that have been awarded.
This policy will apply to development applications involving redevelopment or major addition & alteration (A&A) works to convert office space to other uses. It will also apply to submitted applications which have not been approved.
Significant increase in office space demand, outstripping new supply
Singapore’s robust economic growth has caused a significant increase in the demand for office space over the last two years. In 2005, office space demand increased by 240,000 sqm (Gross Floor Area - GFA) and in 2006 it increased by another 290,000 sqm (GFA), which was the highest annual increase since 2000. In the first quarter of 2007, office space demand increased by another 105,000 sqm (GFA).
The demand for office space is expected to continue to grow, especially in the Central Area, as Singapore strengthens its position as an international financial and business hub.
Based on URA’s information on the expected completion dates of office projects with planning approvals[1], about 330,000 sqm (GFA) of new office space is expected to be completed between now and end 2009. This new supply will be insufficient to meet the projected increase in demand between now and end 2009.
However, the office space situation is expected to improve in 2010 when further new supply, totalling about 330,000 sqm (GFA) is expected to come on-stream, including 180,000 sqm (GFA) of office space from Phase 1 of the Marina Bay Financial Centre.
Measures to provide additional office supply to meet demand in the short term
To ease the short-term office shortage over the next two to three years, URA and other government agencies, such as the Singapore Land Authority (SLA), are implementing short-term measures to make available some additional office space supply for immediate needs. For example, SLA is making available existing state buildings for lease, such as vacant office buildings, suitable old school buildings and disused community centres.
URA is also identifying sites for the development of transitional offices. Such land parcels will be made available on short-term leases to facilitate the development of low-rise office buildings of about three to four storeys. They can be built quickly in about one year and at relatively low cost. URA will release details on the development of transitional offices separately.
Disallowing conversions of office space to other uses to prevent depletion of the existing office stock
Over the last two years, a few office building owners have started to convert their buildings for residential and other uses. Such conversions immediately remove space from the office stock. Existing businesses from these buildings will be forced to find alternative office space.
The impact of such conversions will be most significant in the Central Area, which is the core commercial area in Singapore where about two-thirds of the total island-wide stock of office space is currently located, and where the demand for office space is strongest.
While the government has taken measures to inject office supply into the market in the short term, the office space shortage will be aggravated if existing office buildings in the Central Area are allowed to be converted to other uses. URA has therefore decided to temporarily disallow the conversion of any space which has been approved for office use to other uses in the Central Area until 31 December 2009. This policy will affect development proposals involving redevelopment or major A&A works to convert office space to other uses. The new policy will apply to all current applications which have not been approved and future applications for such conversions. Property owners who have valid planning approvals in the form of Outline Permission, Provisional Permission, or Written Permission to convert office use to other uses before today, that is 21 May 2007, will not be affected by this policy change and will be allowed to proceed with the conversions as approved.
URA will continue to monitor the office property market closely and will review this policy at the end of 2009, taking into consideration the conditions in the office property market at that time.
-----------
Notes
[1] Includes Government Land Sales sites that have been awarded.
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