for en bloc sale Keppel/Singapore
Singapore’s leading asset manager and operator Keppel will shift its focus to other redevelopment projects after the completion of Keppel South Central, according to Samuel Ng, president of Keppel’s real estate division in Singapore. Ng stated that the redevelopment of Keppel South Central is a highlight for the company.
He was referring to the former Keppel Towers, a 27-storey office tower built in 1991, and Keppel Towers 2 (formerly known as GE Tower), a 13-storey building built in 1993. The completion of the flagship 33-storey Keppel South Central commercial tower was announced by Keppel last month. The building, located along Hoe Chiang Road in Tanjong Pagar, offers approximately 650,000 sq ft of office, retail, and event space. The typical office floor plates range between 20,000 and 22,000 sq ft with a clear ceiling height of 3.2m.
Nearly half of the tower’s office space and retail units have been leased or are currently in negotiations. A major financial services group has been secured as the first anchor tenant, leasing two entire floors. Office tenants are expected to start moving in from June.
The tower also features retail and event spaces on the ground floor, health and wellness spaces on the fifth and sixth floors, a landscaped terrace on the 18th floor, and end-of-trip facilities on Basement 1. These facilities were not available in the original Keppel Towers, but they have been added to make the development more attractive to Grade-A office tenants, according to Ng. Additionally, Keppel has a team in place to activate event spaces throughout the tower.
Keppel South Central has been certified by BCA as a Green Mark Platinum Super Low Energy building. This represents a significant improvement in energy efficiency and cost savings compared to before the redevelopment. Keppel estimates energy savings of approximately 6.2 million kilowatt hours (kWh) per year, which is equivalent to the power consumption of 1,300 homes in Singapore. This translates to approximately $1.8 million in savings annually.
To achieve this, Keppel incorporated several green solutions that had been previously tested at another ageing property, Keppel Bay Tower, which was built in 2002. In 2018, Keppel Land utilized a BCA grant to test five new technologies in the building that could improve its energy efficiency by 20% compared to other BCA Green Mark Platinum Buildings. As a result, Keppel Bay Tower became Singapore’s first zero-energy commercial building in 2020.
Keppel is now looking to replicate the success of Keppel South Central across the region as part of its Sustainable Urban Renewal (SUR) strategy. “In the Asia Pacific region alone, the number of office buildings completed in the 1990s or earlier is already huge, and practically all of them are going to fail the new standards for Grade-A office space,” says Ng. “Unless something is done to upgrade them, their capital values will continue to drop.”
According to a March 2024 report by JLL, 87% of occupiers surveyed across Asia Pacific are looking to comprise their portfolio with entirely green-certified properties by 2030. However, the challenge is that for every 5 sq ft of demand across the Asia Pacific region, only 2 sq ft of low-carbon space is expected to be developed from now until 2028. With limited new office supply expected, this presents a significant opportunity for sustainability-focused retrofits.
To fund the redevelopment of brownfield projects across the region, Keppel announced the first close of its flagship Keppel Sustainable Urban Renewal Fund (KSURF), with total funds under management of over $2.3 billion in April. KSURF will target properties across the commercial, living, life sciences, hospitality, and logistics segments in Singapore, South Korea, Japan, Australia, and first-tier cities in China.
Keppel’s in-house capability to execute the renewal works themselves sets them apart from other asset managers, according to Ng. After the fund acquires the asset, Keppel will be able to complete the asset enhancement works, stabilize occupancy, and divest it within the fund’s seven-year life. To date, Keppel has applied its SUR strategy to eight projects across five countries, including Keppel South Central. Three projects have yet to be completed, including Ocean Financial Centre, a 43-storey Grade-A office tower in Raffles Place, Inno88 Tower, a 367,210 sq ft office building in Seoul, and Kohinoor, a 1.1 million sq ft office block in Maharashtra, India.