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Tradition meets modernity in futureproofing Singapore’s hybrid offices
PROPERTY WATCH: GUOCO MIDTOWN Tradition meets modernity in futureproofing Singapore’s hybrid offices
The new Guoco Midtown features five dimensions of office flexibility.
Tenants requested extra meeting rooms, larger town hall, and MICE facilities
Aside from its green deck, a Sky Garden will sit at the crown of the 192-metre-tall office tower For office space, it’s all about efficiency
Work arrangements continuously evolving give rise to the need for flexible spaces. This challenges businesses to determine how much of the traditional office should developers retain or forego in designing a futureproof workspace. GuocoLand struck this balance in the new Guoco Midtown, a 3.2-hectare integrated mixed-use development in Singapore’s Downtown Core.
The development will feature more than 700,000 square feet of Grade A office space expected to house an additional 10,000 office workers, residents, and visitors.
GuocoLand Group General Manager (Asset Management) Valerie Wong told Real Estate Asia in an interview they tapped into their experience in Guoco Tower, and the tenants’ sentiments in designing a development that caters to flexible space needs. The first phase of Guoco Midtown is expected to be completed by the end of the year.
“In our current buildings, Guoco Tower and another building reference, we have a co-working operator that fulfils one level of flexibility, but we wanted to really be a part of the integrated real estate solution for tenants,” GuocoLand’s Wong said.
“We looked at what our tenants requested–they wanted the extra meeting rooms, larger town hall, and MICE facilities for up to 200 persons. We looked at the best of traditional spaces and how this is layered and enhanced with flexible spaces.”
Five dimensions of flexibility
Wong said Guoco Midtown fulfils the need to futureproof offices through five dimensions of office flexibility, particularly Flex in Core, Core to Flex, Flex Connect, Flex Lifestyles, and Flex Cloud. She added this helps ready tenants to make adjustments as needed for scenarios, such as a change in business cycles, or worse, in the case of another pandemic.
Under the Flex in Core dimension, GuocoLand ensured that the property will have highly efficient floorplates that allow tenants to design their office space as an activity-based workplace.
“For office space, it’s all about the efficiency and we built
Valerie Wong
that into the infrastructure – how the core of the building allows tenants to scale up, whether they want to pack 200 persons to 400 persons per floor whilst taking into account fire safety, efficient needs,” she said.
The Core to Flex concept will enable enterprises with their core office based in Guoco Midtown to lease additional dedicated, fitted-out swing spaces. Whilst Flex Connect will allow tenants to tap into a Network Hub annexe building that gives access to service-upon-demand office spaces and meeting facilities.
The Network Hub, spanning 80,00 square feet of space, is directly connected to the office tower. It offers a wide range of amenities, such as lounges, tech-enabled hybrid meeting and training rooms as well as conference facilities that can house up to 200 persons. The Hub also has office pods that have been soundproofed for virtual meetings.
“As a landlord, we have to see when they need to expand, and when they need short-term flexible spaces,” GuocoLand’s Wong said.
“By providing this network hub that offers flexible swing spaces, whether it is just small, for five persons, even up to customised enterprise office, we will allow our tenants to scale up,” she added.
Moreover, Guoco Midtown sought to bring its tenants an immersive work-live-play concept, through its Flex Lifestyle, with a focus on physical and mental wellness. In the Guoco Midtown Gardens, tenants may stroll within a 3.8-hectare landscaped area featuring a collection of 30 private and public gardens with over 350 species of plants.
Guoco Midtown will also have a 40-meter lap pool, a jogging track, and an event plaza that could function as an area for workouts or as an entertainment pavilion. Aside from its green deck, a Sky Garden will sit at the crown of the 192-metre-tall office tower.
On top of the garden and activity areas, Guoco Midtown will feature three retail clusters with an area totalling 50,000 square feet. Two luxury condominiums, the 219-unit Midtown Bay, and the 558-unit Midtown Modern will complete Guoco Midtown’s Flex Lifestyles concept.
Lastly, GuocoLand incorporated its flexibility concept into its IT infrastructure. Through Flex Cloud, Guoco Midtown tenants will be given access to private cloud service on-demand. This could in effect reduce the need for large data centres or server rooms.
Wong said building Guoco Midtown had been challenging as the GuocoLand worked towards catering to the needs of tenants coming from varying industries, such as insurance, life sciences, trading, finance, and even FMCG. But what GuocoLand looked into are the challenges businesses face today, particularly the short business cycles, and the struggle to retain talent.
“They like and appreciate that, as a landlord, we provide for their wellness, with Guoco Midtown’s 40- metre pool and green deck, that would help support their whole wellness and ESG initiatives for tenants,” she said.
“But it’s also very practical because, in a way when they plan their offices, they can literally turn 20% of their space,” she added.
We looked at the best of traditional spaces and enhanced with flexible spaces
LEGAL BRIEFING Hong Kong’s rent control bill aims to bury abusive ‘coffin home’ landlords
A ban on rent hikes in the first two years and caps on subsequent increases after that have landlords worried.
It has been over two decades since rent controls have been implemented in Hong Kong, a city that has usually been laissez-faire with price controls; which is why for low-income families dwelling in subdivided units (SDUs) who have been grappling with high rents, plans under the Landlord and Tenant (Consolidation) (Amendment) Ordinance 2021 to prohibit any increase in the rent for the first term of tenancy, which is equivalent to two years, should be welcomed.
On renewal, which is another two years, landlords of the so-called “cage houses” or “coffin homes” may only increase rent up to a 10% cap, but they may be restricted to an even lower rent rise.
The rent hike for the second term tenancy is determined by the percentage change of the citywide rental index published by the Rating and Valuation Department, which means that landlords cannot always increase the second term rent by 10%.
“If the percentage change of the relevant rental index published by the Rating and Valuation Department is lower than 10%, the landlord can only increase the rent to such percentage at most. If such percentage is negative, the rent must be reduced at least by such percentage,” Lilian Chiang, a senior partner at Deacons, explained to Real Estate Asia.
In general, what the bill aims to do is safeguard tenants’ security of tenure and protect them from arbitrary rent increases. Some legal experts have cast doubts on whether the bill will actually work as intended.
Chiang expressed doubt as to whether the bill can effectively protect tenants because the bill does not regulate initial rents. “Since there is no restriction on the starting rent of the first term tenancy… the landlords may charge a higher starting rent to offset the cap on increase of rent,” she said.
This view was shared by Janice Yau Garton, a partner at Stephenson Harwood LLP, who told Real Estate Asia that “without regulation on initial rents and rents of future renewals after the protected 2+2-year terms, the problem of excessive rental hikes does not go away permanently.”
Since the measure was only implemented on 22 January, Garton said tenancy agreements entered before its implementation could have high rent, unfair terms and/or a longer rental term, circumventing the purpose of the amendment ordinance.
Another provision of the bill that would push landlords to greatly increase rents for existing and new tenancies is the forbiddance of overcharging tenants for utility bills, Doreen Kong, a partner at ReedSmith LLP said.
The problem of excessive rental hikes does not go away permanently
The measure is a “band-aid on a bullet wound”
Under the bill, “if the utilities of the SDUs are not separately billed, the landlords can only seek reimbursement from the tenants if copies of bills and accounts showing how the amounts are apportioned to different parts are provided to the tenants, and the aggregate of the apportioned amounts do not exceed the billed amounts,” Chiang also explained.
If landlords will not impose increased initial rents, they will likely put the quality of their substandard flats at stake to counteract the rental hike cap, reducing the cost of repair and maintenance during the first two terms when they need to shoulder it, Chiang said.
A loss for landlords?
One of the biggest disadvantages that the bill brings upon landlords is their inability to terminate a regulated tenancy to sell their property with vacant possession, Garton said.
Such tenancy restrictions impair a landlord’s “property rights through restricting their rights to the use and disposal of property guaranteed by Articles 6 and 105 of the Basic Law,” Kong said.
“It remains doubtful whether an appropriate balance has really been struck between the protection of tenants and interests of the landlords,” Kong added.
Looking at the bill’s effect on a larger scale, particularly on Hong Kong’s housing crisis, Kong said the measure is at most a “band-aid on a bullet wound.”
Kong added that there’s a need for a “comprehensive and integrated plan on tackling housing problems.”
A band-aid solution
Garton agreed, saying that HK needs longer-term housing policies like building transitional housing, increasing housing supply in a faster and more efficient manner, and tighter regulations overbuilding and fire safety since its housing problem is a multi-layered issue that cannot be solved overnight.
“Landlords are also able to charge more per square foot for SDUs and are unlikely to give up renting out SDUs just because of the new controls. If we compare the average rent of SDUs with private residential nonSDUs on Hong Kong Island by the square foot, SDUs are at $52.60 per square foot compared to $40.70 for the other,” she added.
Garton, however, said the ordinance is still a step in the right direction to alleviate the housing problems in Hong Kong, especially when coupled with other longer-term measures. Besides, the city “needs to start somewhere.”
Chiang, for her part, said the bill will help the government “collect more data in relation to SDUs for the purpose of formulating more effective housing policies,” since landlords will have the duty to notify the Rating and Valuation Department of the particulars of the tenancies of SDUs.
The rental control policy is a shortterm, perhaps temporary, measure that does not resolve underlying issues in the Hong Kong market
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