Riding on a government-led initiative to transform Woodlands into a commercial hub, Far East Organization has sold half of the released 124 strata office units in Woods Square, an integrated development it is jointly developing with Sekisui House and Far East Orchard. Prices ranged from S$1,700 to S$2,230 per square foot (psf).
For the first time, it will also be consolidating its satellite operations under one roof, taking up some 70,000 sq ft or three-and-a-half floors in the office tower that it is retaining for lease.
“It shows our confidence in this product and this location,” Far East chief operating officer for property sales Shaw Lay See told BT. Operationally, it will also enhance business efficiencies and collaboration across business units, she said.
Located near Woodlands MRT with connectivity to Woodlands Civic Centre and Causeway Point, the 99-year leasehold project features two office towers and two “Small Office Loft Office” (SOLO) blocks with retail, F&B and a childcare centre.
As the first strata office development in Woodlands since the government unveiled its masterplan in 2014 for Woodlands Regional Centre, the project is closely watched by the industry for how a front-mover in the untested region will fare.
A total of 365 office units of 549-5,339 sq ft in Tower 1 and 101 SOLO units (495-1,808 sq ft) in two blocks are up for sale. Far East is keeping Tower 2 for rental by floors. There are eight units of 22,600-22,800 sq ft in Tower 2, including the floors to be taken up by Far East and one floor of 21,500 sq ft to be donated to three non-profit organisations.
Ms Shaw said the take-up at Woods Square since the start of sales on July 29 “has been encouraging”, vis-a-vis some 35 strata office transactions by developers from January to July.
Data shows that there were 30 new sale transactions in strata office worth S$60.87 million in the first half this year at an average S$2,620 psf, mostly in Centrium Square, the former Serangoon Plaza.
For Woods Square, the average prices achieved so far were S$1,800 psf for office units and S$1,950 psf for SOLO units. “We are in no hurry to clear all units,” Ms Shaw said.
Unfazed by what some market watchers described as a glut of unsold strata office in the market, Ms Shaw noted that location is a key consideration for buyers amid a lack of alternative strata offices in Woodlands.
A second commercial site in Woodlands Square is available for application under the Reserve List of the government land sales (GLS) programme, with at least 60 per cent of the total gross floor area (GFA) to be dedicated to office use. But its tender conditions do not allow for more than three strata lots, except for residential GFA, which inhibits the developer that secures the site from slicing out individual office units for sale.
Noting that government plans for a new business cluster Woodlands North Coast have been announced only in broad strokes, Ms Shaw said: “When the authorities come forward to make more specific announcements on exactly what’s going to happen, the interest will grow.”
Far East is keeping the retail component of Woods Square for leasing. It will then decide on the trade mix two years before the project obtains temporary occupation permit in 2021. As for the 5,400 sq ft childcare centre, the group is in talks with a few potential vendors.
There are also meeting spaces, an auditorium and theatrette, as well as lifestyle facilities such as the gym and swimming pool in the development.
ERA Realty key executive officer Eugene Lim, who is marketing the project, felt that while there is still a lot of hype surrounding the Jurong rejuvenation story, it is about time that investors start to look at Woodlands as the commercial cluster shapes up by 2030. “Later on, when everything falls into place, we may see a capital appreciation over time,” he said.
Mr Lim said that marketing agents have been sussing out interest door-to-door from business owners in the industrial estates in the north. Buyers are predominantly small-and-medium enterprises already operating in Woodlands or have business dealings in Malaysia.
Some 65 per cent of the buyers are corporates – mainly business owners and professionals offering services from construction, manufacturing, trading, legal and the creative industries – while the rest are individuals. A majority of corporate buyers are Singapore-incorporated, with Malaysian companies featuring strongly among foreign corporate buyers, Ms Shaw said.
Creative industries are among the key targets for Woods Square, in view of the upcoming North Coast Innovation Corridor that will stretch from Woodlands Regional Centre to Punggol. While the typical office units are more popular with a wider range of businesses, Ms Shaw noted that startups are warming up to the SOLO concept, which has a floor-to-floor height of five metres.
Adapted from: The Business Times, 26 August 2016