Lendlease’s Justin Gabbani makes inroads in life sciences, data centres
By Cecilia Chow
/ EdgeProp Singapore |
Justin Gabbani of Lendlease: We see strong demand in the life sciences. It’s a very attractive sector (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - Since assuming the position of Lendlease CEO for Asia this June, it has been a busy four months for Justin Gabbani. His predecessor, Tony Lombardo, has taken the top job of global CEO at the listed Australian property group with a market capitalisation of A$7.5 billion ($7.5 billion). Having moved to the global headquarters in Sydney in April, Lombardo embarked on a seven-week tour (from mid-September to end-October) of key cities where Lendlease has a presence — Singapore, San Francisco, New York City, Washington, Chicago, Milan and London, according to Financial Review.
Meanwhile, Gabbani is working from home like the rest of his team in Singapore, where restrictions have been extended until Nov 21. “Going around to the other countries and having physical meetings is what I’m looking forward to most,” he tells EdgeProp Singapore over a Teams conference call.
No stranger to the region, Gabbani, who joined Lendlease in 2003 in its graduate programme, moved to Singapore in 2011. He was Lendlease’s CFO for Asia for the past 4½ years, and prior to that, head of investment and capital markets for Asia and Europe. “I’ve been in Singapore for 10 years,” he says. “I’m very familiar with the business here.”
Lendlease has constructed more than 90% of the biotech facilities at Tuas Biomedical Park (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Life sciences boom
The ongoing Covid pandemic has sparked a boom in life sciences, a sector that Lendlease is already active in. Early last month, Lendlease announced that it will begin construction of a large-scale, greenfield vaccine facility in late 2021.
The facility is located at the 280ha Tuas Biomedical Park, a master-planned, specialised industrial park by JTC Corp in the late 1990s. Major biomedical firms that have located there include Abbot, Amgen, Genentech, Lonza Biologics, Merck, Novartis and Pfizer.
Lendlease has constructed more than 90% of the biotech facilities at Tuas Biomedical Park. The firm built a majority of Singapore’s major pharmaceutical facilities, and some of them have engaged Lendlease for additional projects, including expansion of their existing facilities.
Beyond construction, Lendlease wants to participate in developments and investments in this sector in Asia. “We see strong demand in life sciences,” says Gabbani. “It’s a very attractive sector.”
He points to the life sciences hub in Boston, Massachusetts, that Lendlease is developing in partnership with Canadian real estate player Ivanhoe Cambridge. It is an A$800 million, 320,000 sq ft, state-of-the-art facility devoted to life sciences.
Artist’s impression of the new Shaw Tower, a 35-storey integrated development with 450,000 sq ft of Grade-A office space and 30,000 sq ft of retail and F&B space on the ground floor (Credit: Aedas)
Value-add projects, partnerships
In October last year, Sir Run Run Shaw Charitable Trust appointed Lendlease as the project manager for the redevelopment of Shaw Tower on Beach Road. The 35-storey office building with a retail podium was built in 1975. Demolition works is underway and construction of the new tower is scheduled to start early next year.
An integrated development, it will stand nearly 200m tall, with views of Marina Bay and the city. Designed by architectural firm Aedas, the new 35-storey tower will have 450,000 sq ft of Grade-A office space and 30,000 sq ft of retail and F&B space on the ground level. There will also be end-of-trip cycling facilities and sustainable features that meet BCA’s Green Mark for sustainability and the International Building Institute’s WELL rating for health and wellness.
The new Shaw Tower is slated for completion by end-2024, to dovetail with the completion of the neighbouring Guoco Midtown integrated development. “It’s going to be part of the Beach Road rejuvenation,” says Gabbani. It will be connected via pedestrian links to both Guoco Midtown and South Beach mixed-use developments, with easy access to Bugis, Esplanade, City Hall and Promenade MRT Stations.
Lendlease and security firm Certis have formed a partnership to redevelop the latter’s headquarters, Certis Cisco Centre at 20 Jalan Afifi. The 130,211 sq ft site, with a 30-year, revolving lease from 2013, was purchased for $150 million or $1,152 psf based on the land area, according to a caveat lodged in March this year.
Certis Cisco Centre will be redeveloped into a new, “green and sustainable project” with about 30,000 sq m (322,917 sq ft) of office space, according to Lendlease.
Lendlease is redeveloping Certis Cisco Centre in a partnership with Certis (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Resilience of mixed-use, urban regeneration project
The Certis Cisco Centre site is within a two-minute walk of Lendlease’s $3.7 billion, integrated development Paya Lebar Quarter (PLQ). Lendlease prides itself as a place maker with a specialty in urban regeneration projects such as PLQ and Melbourne Quarter in Melbourne.
Despite Covid and work-from-home arrangements, the three office towers at PLQ, with 870,000 sq ft of Grade-A office space, are 99% leased today. “We haven’t really seen people shy away from committing to new office space,” says Gabbani.
The 72,000 sq ft Csuites, Lendlease’s flexible workplace concept at PLQ, was fully taken up by this August, following a spike in demand for flexible workspaces from last November. “Corporate tenants increasingly see it as an amenity,” Gabbani adds.
PLQ Mall, with 340,000 sq ft of retail space, is 97% leased. “Central services — supermarkets, pharmacies — continue to be very resilient,” notes Gabbani. “F&B has been pretty resilient as well, notwithstanding the various restrictions.”
The 429-unit Park Place Residences at PLQ are fully sold and were completed in 2019, ahead of the pandemic. Launched in March 2017, 50% of the units were sold at a median price of $1,805 psf. The second tower, launched a year later in April 2018, saw another 149 units taken up at a median price of $2,060 psf. Units have changed hands in the resale market at prices from $1,836 psf to $2,240 psf, according to caveats lodged from May to September 2021.
Lendlease is eyeing more ambitious developments, namely master developer projects, says Gabbani. An example is the 8.29ha Kampong Bugis site located next to the Kallang Basin, which was put on the Reserve List of the 2H2019 Government Land Sales programme. The site could yield 4,000 dwelling units and 50,000 sq m gross floor area of commercial space for retail, office, serviced apartments or hospitality use.
The 429-unit Park Place Residences at PLQ was completed in 2019, and is the latest phase in the Paya Lebar Quarter mixed-use development to be completed (Photo: Samuel Isaac Chua/EdgeProp Singapore)
‘Most established market’
Singapore is Lendlease’s most established market, says Gabbani. “We have been here for 48 years, across all three business lines [construction, development and investment],” he adds. “We probably have the most capital invested in Singapore.”
Of A$2 billion capital allocated to Asia over the past five years, A$1.5 billion has been invested. Singapore accounted for the biggest share of the investment. “We have another A$500 million to invest but we will also recycle our capital when we complete our developments,” says Gabbani.
Apart from Singapore, the other three markets in Asia where Lendlease has a presence are Malaysia, China and Japan.
In Malaysia, where Lendlease ventured into some 30 years ago, the focus has been on two projects. One of them is Setia City Mall, an 80:20 joint venture project between SP Setia and Lendlease Development (Malaysia). Lendlease’s 20% stake in the mall is held by one of its private funds.
With 730,000 sq ft of retail space and 235 stores, Setia City Mall opened in 2012. The second phase of 450,000 sq ft retail space and 150 new stores, was slated for completion by 2020. It will bring total retail space at the mall to 1.2 million sq ft, making it the biggest in Shah Alam.
Covid had impacted the final stages of pre-leasing and development of Setia City Mall II, Gabbani concedes. Since the second phase opened this April, “stabilisation” has been ongoing.
Artist’s impression of The Exchange TRX, a mixed-use development with a 1.3 million sq ft mall, the first two residential towers with a total of 896 units, Kimpton Hotel and offices. The development will be connected to TRX Park and a dedicated MRT station (Credit: Lendlease)
Multi-billion-dollar The Exchange TRX
Lendlease’s biggest project in Malaysia is The Exchange TRX, Kuala Lumpur, with an estimated gross development value of about A$3 billion. The mixed-use development is a 60:40 joint venture between Lendlease and Malaysia’s Ministry of Finance.
The Exchange TRX is described as “a new vibrant lifestyle destination”, seamlessly connected to Tun Razak Exchange, “a city-defining development and Malaysia’s new CBD”.
Sitting on a 6.9ha site, The Exchange TRX is a mixed-use development with retail, office, hotel and residential components, and connected to a park and future MRT station.
The first phase of the residential component, TRX Residences Tower A is 53 storeys tall with 443 units, while Tower B is 57 storeys with 453 units. The two towers are targeted for completion in FY2024. About 314 units (35% of 896 units) across the two towers have been presold, according to Lendlease’s FY2021 annual report. Units start from 474 sq ft for a one-bedder, with prices upwards of RM970,000 ($313,252). “All available units in Tower A have been sold, and we continue to receive strong interest for Tower B,” says Gabbani.
Interest is said to come from a good mix of foreigners, Malaysian expatriates living overseas and locals. Another 1,630 units are in the pipeline for launch, bringing total residential stock to 2,526 units.
The retail mall has a net lettable area of about 1.3 million sq ft, and is slated for completion in FY2023. Given its scale, Lendlease has been focused on its pre-leasing over the past 12 months. Tenants include Seibu Department Store, which will be taking up 250,000 sq ft across four levels; an upscale supermarket brand by Hong Kong’s Dairy Farm Group; and a new cinema-cum-entertainment concept by Golden Screen Cinemas. Leasing of the F&B space will start at the end of the year.
The hotel component marks the debut of Kimpton Hotels and Restaurants — a brand under IHG Hotels & Resorts — in Malaysia. The smallest component at The Exchange TRX is the office space, which accounts for 65,000 sq m out of a total of 187,000 sq m of commercial space.
The garden of one of the 250 apartments in the first phase of Ardor Gardens, Shanghai, a senior living development by Lendlease in China. When fully completed, it will have a total of 878 apartments (Photo: Lendlease)
Senior living in China
In China, Lendlease’s focus has been on Ardor Gardens, a senior living project in Shanghai, on the banks of Dianshan Lake. The low-density project has 20 buildings of four to six storeys spread across an area of 85,000 sq m.
Of the 878 apartments in the development, more than 250 in Phase One have been delivered. The remaining phases will be completed over the coming year. To date, half the units released in the first phase have been taken up, and units are sold based on a membership model, says Gabbani.
Ardor Gardens is the first senior living project in China to be conferred a WELL health and safety rating. Facilities include themed clubhouses, handicraft rooms, a senior-friendly gym, heated swimming pool and a community restaurant helmed by a chef and a professional nutritionist. There are medical facilities within the project, while a hospital is nearby too.
“With an ageing population, the Chinese government wanted to create a senior living industry, and it was this policy push that allowed us to secure this parcel of land,” says Gabbani. Lendlease continues to pursue opportunities in this nascent sector in China.
Lendlease will pursue data centre opportunities across all markets in Asia (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Large-scale data centre in Japan
In Japan, Lendlease embarked on its maiden data centre development under Lendlease Data Centre Partners (LLDCP) in August. One of the largest data centre developments in Japan, it has an end development value of more than A$800 million.
Located in Greater Tokyo, the data centre facility will occupy 33,000 sq m of land. The 600,000 sq m project will be developed in two phases. The first phase has been pre-leased to a major data centre operator, which has taken the option on the second phase too. The existing office building on the site will be demolished, with construction to commence in the middle of next year. The first phase is slated for completion in 2024.
While Japan may mark its flagship project, LLDCP will pursue data centre opportunities across all markets in Asia, says Gabbani. Lendlease will fund 20% of LLDCP, with the remaining 80% by an unnamed “global institutional investor”.
In Japan, Lendlease is looking for opportunities in urban regeneration, mixed-use developments and value-add opportunities with building owners like what it has done in Singapore.
Indeed, Lendlease will continue to focus on five key sectors across Asia: “commercial and residential development, life sciences, data centres and senior living”, says Gabbani.
Check out the latest listings near Shaw Towers, Certis Cisco Centre, Park Place Residences at PLQ, Promenade MRT Station
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