Property group CapitaLand and two of its subsidiaries CapitaMalls Asia and CapitaMall Trust Management will build a S$1.5 billion retail and office property on their newly acquired land site in Jurong Gateway.
They said the 25-storey property will complement offerings from their nearby malls IMM and JCube.
The White site was acquired for S$969 million or S$1,012 per square foot per plot ratio, based on a plot ratio of 4.9.
The site is the second one to be released as part of the development of Jurong into a work-live-play hub in the West.
The first site was acquired by Australian developers Lend Lease for S$748.8 million in June last year.
Lend Lease is building a mixed-use development on the site.
The firms said the property’s retail and office components will ride on retail rental growth, as well as the development of the surrounding Jurong Lake District.
The 957,780 square feet retail and office property would be built right beside Jurong MRT Station.
The shopping mall component of the property is five-storeys high and is expected to open by December 2013.
The mixed-use property lies between IMM Building and JCube – which are also developed by CapitaLand’s retail and trust units.
CapitaMall Trust Management chief executive officer Simon Ho said: “We think there is still room for retail in Jurong East.
“We already operate IMM and JCube in this area but we find that another mall will be useful to serve the one million population catchment in Jurong, Clementi, Bukit Batok and so on”.
Together with IMM Building and the upcoming JCube, there will be a total of one million square feet of net lettable area in the Jurong Gateway area, offered by CapitaLand’s retail and trust units.
The project is also in the heart of the Jurong Lake District, slated to be a new regional hub in the west of Singapore.
The Jurong Gateway area is also about 2.5 times larger than the Tampines Regional Centre.
Analysts said Jurong Gateway holds much potential for retail malls.
Chesterton Suntec International head of research and consultancy Colin Tan said: “Its main attraction is the interchange… at the crossroads of MRT lines.
“That alone should ensure there will be crowds there. It will have enough shopping and commercial space to be an attraction in itself”.
CapitaMall Trust Management said its new development should ride on steady retail rental growth.
The project’s retail rentals are expected at S$16 to S$18 per square foot.
It will target mini-anchor and specialty tenants, in order to complement Lend Lease and the upcoming JCube’s anchor tenants.
“For the first quarter, CapitaMall Trust renewed about 145 leases and we got a 7.5 per cent increase over the previous rent. That’s pretty decent and that’s leases spread out through surbuban malls and city malls,” Mr Ho said.
The project’s 20 floors of office space should be fully operational by end-2014.
By then, its developers said its office rentals should reach S$8 per square foot.
CapitaLand’s retail and trust units said the project’s yields, which are based on both office and retail rentals, should come up to about six per cent annually once it is up and running.
Source : CNA – 1 Jun 2011
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