Lendlease to play on its strengths as master developer of large-scale regeneration projects
By Michael Lim
/ The Edge Property |
Australian property giant Lendlease’s maiden residential project in Singapore, the 429-unit Park Place Residences at Paya Lebar Quarter (PLQ), saw 215 units (50%) sold on the first day of sales on March 25. Units sold ranged from $800,000 for a one-bedroom unit to $2.1 million for a three-bedroom premium unit, or from $1,600 to more than $2,000 psf.
Lendlease says in a statement that the showsuites will be closed, and details of Phase 2 sales will be released later this year. Prices of the remaining units are projected to be higher because of the upcoming Grade-A offices, shopping mall, plaza and parkland, as well as the greater Paya Lebar Central area.
PLQ is a mixed-use scheme on a 3.9ha, 99-year leasehold site. When completed by end-2020, it will have a shopping mall with more than 200 shops, three Grade-A towers with a total of about one million sq ft of office space and three residential towers. The project is adjacent to the Paya Lebar MRT interchange station.
The $3.2 billion PLQ is the centrepiece of the 12ha Paya Lebar Central, which URA has designated as a future commercial hub under Master Plan 2008. The area is undergoing gentrification, as some of the old warehouses and factories are zoned for redevelopment.
This is not the first time Lendlease is undertaking a massive regeneration scheme. In Sydney, Lendlease is the master developer of Barangaroo South, an A$8 billion ($8.5 billion) regeneration scheme on a 22ha site. It is a redevelopment of a former container wharf located on the western edge of Sydney’s CBD.
Aerial view of Barangaroo South, with artist’s impression of Crown Hotel and casino and two residential towers, the completed International Towers Sydney, as well as the apartment blocks fronting Darling Harbour
Lendlease was chosen as the master developer of the site by the Barangaroo Delivery Authority (BDA), which is part of the government of New South Wales, in December 2009. When the entire development is completed in 2022, Barangaroo South will have three office towers — collec tively called Inter national Towers Sydney — with retail and F&B on the first level; a six-storey office block; a 71-storey Crown Sydney Hotel with a casino, 350 hotel rooms and luxury apartments; as well as two high-rise and three low-rise residential towers. Baranga roo South is also within walking distance of Wynyard train station in Sydney’s CBD.
Creating a community
Tony Lombardo, Lendlease CEO for Asia, says: “Large-scale projects such as PLQ and Barangaroo South give us flexibility to design and create a place, a community and an environment that will attract people to want to work, play and live there. It’s harder to create a community if you have just a standalone building.”
The fact that such large-scale projects tend to take 10 to 15 years to complete and stabilise is no deterrent for Lendlease. “Property markets are cyclical,” says Lombardo. “That’s why we have adopted a longterm investment horizon — because at some point of the cycle, the market will be soft, but it always picks up over the long term.”
Lombardo: Large-scale projects such as PLQ and Barangaroo South give us flexibility to... create a place... that will attract people to want to work, play and live there
Over the past decade, Lendlease has therefore been focusing on urban renewal projects in key cities in Australia and around the world. In 2008, it had just one urban regeneration scheme: Melbourne Quarter in Victoria Harbour. Today, the property group has a pipeline of 12 urban regeneration schemes worth A$37.3 billion, which accounts for 76% of Lendlease’s entire development portfolio — estimated at A$49 billion.
In Australia, its urban regeneration schemes include Darling Square & International Convention Centre in Sydney, Brisbane Showgrounds in Brisbane, and Victoria Harbour in Melbourne. In London, it has redevelop ed the former Heygate Estate at Elephant & Castle into the new Ele phant Park with 2,500 new homes, including the 37-storey landmark apartment tower, One The Elephant. The project is a joint venture with the Southwark Council in London. Meanwhile, in Stratford, East London, it is developing the International Quarter, another regeneration scheme.
Over in the US, Lendlease has two urban renewal projects in Boston and Chicago. The 12-acre site in East Boston is located at the Boston Inner Harbour. Lendlease also plans to develop a project with four residential blocks comprising 214 apartments and 278 condos, with a pedestrian walkway along the harbour. On the Chicago River, it will transform a former industrial site into Riverline, a 3,600-unit residential development with a mix of high-rise condos and townhouses. The new project in Chicago will include a public park and pedestrian river walk.
In Asia, PLQ is Lendlease’s biggest urban regeneration project in terms of dollar value. In terms of size, the A$2.7 billion Lifestyle Quarter at Tun Razak Exchange in Kuala Lumpur, which occupies a 17-acre site, is the largest.
Scope for two to four more regeneration projects
Lendlease intends to invest further in Asia. Lombardo sees scope for two to four more regeneration projects in Malaysia and Singapore. He is interested in the Kampong Bugis urban rejuvenation, for which the Singapore government has said it is looking for a master developer.
Kampong Bugis will be the first local urban regeneration project to adopt the new “master developer approach” to be undertaken by a private sector developer; it is part of URA’s bigger plan to rejuvenate the neighbourhood fronting Kallang River.
The precinct has a land area of 17.4ha fronting the Kallang River and Kallang Basin. The plot of waterfront land was once home to the Kallang Gas Works and was left mostly vacant for years. The site can yield 4,000 new homes, according to URA.
Lombardo welcomes the government’s effort to adopt the master developer approach. “We are interested in Kampong Bugis because it is a waterfront site, which offers us the opportunity to create something new in the area,” says Lombardo. “We could replicate some of the waterfront plans we have in Barangaroo South, Boston Inner Harbour or Chicago’s Riverline.”
F&B outlets on Level 1 of waterfront-facing apartment blocks in Barangaroo South
At Barangaroo South, the three office towers — Inter national Towers 1, 2 and 3 — were completed between 2015 and 2016. Lendlease’s global headquarters spans 11 floors in the 39-storey Tower 3. It has a hot-desking concept, and one floor is designed as a café and lounge, which is open to clients, suppliers and other visitors.
According to Lombardo, Lendlease is looking at introducing co-working at the office towers in PLQ. “We are looking forward to collaborating with co-working space providers to explore offering such workplace concepts,” he says.
Lendlease also announced that it would relocate 100 of its staff at Mapletree Anson to the new co-working space, The Work Project at OUE Downtown Gallery, slated to open in June. The staff will be working at The Work Project for between 18 and 24 months, until the office towers at PLQ are completed.
This article appeared in The Edge Property Pullout, Issue 773 (Apr 3, 2017) of The Edge Singapore.
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