Keeping Singapore attractive as a corporate headquarters location
To maintain its appeal to multi-national corporations (MNCs), Singapore needs to stay ahead of its main competitors in terms of the built environment on offer. What factors encourage inward investment by office occupiers into Singapore? What elements are required for successful future office developments?
The key to maintaining functional and desirable office stock is two-fold: First, taking a forward-thinking and measured approach to both new developments and redevelopment projects; and second, constantly enhancing and renewing developments on offer. The New Downtown gives Singapore the perfect opportunity to ‘up the ante’ in office space and maintain the attractiveness of Singapore as a headquarter location for years to come.
Corporate real estate executives, board of directors and decision makers for office occupiers are influenced by physical flexibility, technical specification, staffing, security and sustainability when deciding on where to locate their business.
Physical flexibility
While the outgoing costs in terms of dollars and cents of headline deals are vital and obvious considerations in any leasing transaction, an educated decision maker is well aware that there is a substantial amount more to consider in terms of long-term day-to-day operating costs.
The cheapest headline rental deal often does not secure the cheapest occupational solution over the long term. Given the speed at which modern businesses change shapes and sizes, decision makers are now looking at how their businesses grow and contract within their respective space, and how to mitigate the costs involved with these fluctuations. The built environment on offer should aid in mitigating this cost by providing infrastructure that facilitates ease of churn.
The shape, size and layout of a building’s floor plate will affect efficiencies in a regularly shaped floor, which will reduce wasted space and the total occupied space. Generally, buildings with larger floor plates have a central core to allow maximum flexibility in terms of subdividing floors while maintaining minimal distances to services (fire stairs, washrooms) within the core.
Technical Specification
A major consideration in any office set-up or relocation is the initial capital expenditure (Capex) involved in setting up premises. Many modern buildings provide infrastructure such as water supply to each floor, knock-out panels for internal staircases, heavy load areas for compact uses/safes (negating the need for weight spreading plates), tenant-dedicated risers to allow cabling between floors etc. This type of infrastructure will substantially reduce the upfront Capex costs and reinstatement cost at the end of the lease.
Occupiers in the banking and finance sector have more far-reaching technical requirements, including 24-hour air conditioning for data centres within their premises. These can be very expensive; therefore, many prefer to have access to chilled water for their own systems, dual power systems in cases of failure and back-up generators.
Long-term running costs and usability of each development can vary significantly from building to building; therefore, the quality and thought behind the construction plays a significant part in the operational efficiency of the building. Detail is important – from the thickness and reflective coating on the exterior glass façade (providing heat and glare protection) to the speed of the lifts.
Staffing
Staff satisfaction and safety come high on the list of any occupier. The built environment has to provide a good working environment in terms of both the building itself and the surrounding amenities, for example, proximity to public transport, hotels, retail and F&B facilities.
Natural light is another key consideration, and many countries have a maximum core-to-curtain wall depth to allow sufficient natural light to the whole space. Developers of Grade A buildings need to consider this factor and ensure that sufficient artificial light is provided to prevent eye strain. Most occupiers require a standard 400-500 lux wherever artificial light is needed.
Security
Intellectual property rights and terrorism are still major concerns for most occupiers of business space, so the built modern environment needs to address staff safety and the integral security of the workplace.
Occupiers who consider themselves as relatively high-risk/high-profile targets are reviewing security protocols and putting heightened measures in place. We commonly see practices such as physically segregating workspaces and client-facing areas with access-controlled doors to limit access to premises. Tenants favour building owners that install enhanced security systems such as access cards and turnstiles.
A common comment from many of our clients around the region is that even in buildings where main entrance lobbies have high levels of security, there is minimal effective control over access to goods lifts and car park lifts through the basement car parks.
Sustainability
Corporate social responsibility (CSR) is an issue that is increasingly becoming a focus at the boardroom level of many occupiers. For many businesses, pollution caused by occupational premises is a substantial part of its carbon footprint. In light of this, occupiers considering new premises are looking for environment-friendly buildings to minimise their carbon footprint. Older buildings are very expensive to retrofit with environmentally friendly or sustainable building systems and infrastructure.
Meanwhile, many new developments are now focusing on attaining either the Singapore Building and Construction Authority of Singapore (BCA) Green Mark or the US Green Building Council’s LEED – with some even getting both.
The Changing Face of the Singapore CBD
The supply pipeline coming into the Singapore market from 2010 to 2013 is approximately 7.3 million sq ft. Much of the new supply will be allocated in the CBD and will focus on the traditional core financial district of Raffles Place or the New Downtown.
While there has been much commentary warning of oversupply, this needs to be taken into context with the need to upgrade Singapore’s financial district. Singapore is looking to position itself and maintain its position as a major global financial hub. To achieve this, the physical office stock has to be in place to house the finance industry.
Located in Singapore’s new Central Business District, Marina Bay, Asia Square is a fully integrated office development developed by MGPA. Tower 1 will be completed next year and Tower 2 in 2013.
Mr Jeremy Choy, project director at MGPA, said: “Asia Square measures up to demanding space requirements. The impressive capacity and regular floorplate design not only maximises productive space, but allows for a maximum density of 450 people per floor – ideal for bank trading functions.”
Singapore’s CBD currently only has 3.5 million sq ft of Grade A space with floor plates of about 20,000 sq ft. The upcoming supply will increase this to about 10 million sq ft by 2012 and will enhance the quality of office stock offered in the market. This amount of space is needed to house Singapore’s financial occupiers and keep Singapore competitive.
By Jones Lang Lasalle
