A joint venture (JV) between Far East Organization, Far East Orchard and Sekisui House has obtained provisional permission from URA to develop Woods Square, a mixed-use office and retail project next to Causeway Point in Woodlands. According to URA, the project’s gross floor area (GFA) will comprise 629,581 sq ft of offices and 64,583 sq ft of retail component. There is talk in the market that the project’s strata offices will be launched for sale in October, with prices starting from $2,200 psf.
The JV paid $634 million, or $906 psf per plot ratio, for Woods Square site in April 2014, which was 10% lower than the $1,009 psf ppr Sim Lian paid for its Vision Exchange site in Jurong East in March 2013. Vision Exchange is a 25-storey office tower with 640 office units, 53 medical suites and 47 F&B outlets. The project has sold over 70% of the 250 office units available in the first phase of launch at an average sales price of $2,277 psf, based on caveats lodged with URA.
Woods Square’s office units will be housed in two 16-storey towers, comprising small and large strata offices for sale and lease. The retail units will occupy level one and the basement, with direct connectivity to the MRT station and Causeway Point, and will be available for lease.
Alan Cheong, head of research at Savills Singapore, says, “Woods Square represents the first new-to-market, office-for-sale development in the Woodlands area. Although the concept of office development in Woodlands is untested, nevertheless, its first-to-launch status puts it in a strong position to tap the pent-up demand for such uses from industrial space users in the surrounding area.”
Cheong noted that the nearby 5 Woodlands Industrial Park houses small and medium enterprises and multinational companies, which would have need for office uses. Stronger enforcement of the restricted uses allowed in these B1 and B2 premises would lead to a trickle-down effect on the demand by companies that require good office premises to be close to their manufacturing or logistics operations.
Christine Li, research head at Cushman & Wakefield, expects Woods Square to see a buzzing pool of R&D activities given the planned development of the North Coast Innovation Corridor in Woodlands Regional Centre. “Nevertheless, it will take time for Woodlands Regional Centre to take shape and it might be a long gestational period when everything in the regional centre materialises. As such, investors need to have a longer-term horizon when it comes to investment in the area,” she says. According to Cushman & Wakefield, decentralised locations such as Jurong experienced an increase in leasing activity in 2Q2015, citing demands from companies seeking for cheaper occupancy costs amid a challenging business environment.
Across the street, a second plot of commercial site has been made available for sale under the Reserve List of the 1H2015 Government Land Sales Programme. The site has a maximum GFA of 843,319 sq ft, of which at least 506,000 sq ft must be set aside for office use and a separate 10,764 sq ft for a childcare centre. The remaining GFA may be utilised for additional offices, service apartments and/or residential uses as well as shops and F&B component.
Woodlands Regional Centre is one of the target growth areas in the Master Plan 2014. The area, which comprises Woodlands Central and Woodlands North Coast waterfront, is poised to follow the footsteps of Jurong. Over the next 10 to 15 years, Woodlands Regional Centre will have about 7.5 million sq ft of commercial space and offer approximately 100,000 new jobs.
“Another strong positive for Woods Square is accessibility by the MRT, making hiring of administrative staff and professionals easier,” says Savills’ Cheong.
This article appeared in The Edge Property Pullout of Issue 689 (August 10) of The Edge Singapore.
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