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Keppel, a homegrown global asset manager and operator, has announced a shift in its focus towards other brownfield redevelopment projects as the completion of Keppel South Central marks its flagship project. According to Samuel Ng, the president of Keppel’s real estate division in Singapore, the redevelopment of Keppel South Central is a showcase of their capabilities.
Formerly known as Keppel Towers and GE Tower, Keppel South Central is a 33-storey commercial tower located along Hoe Chiang Road in Tanjong Pagar. With about 650,000 square feet of office, retail, and event space, the tower offers typical office floor plates ranging from 20,000 to 22,000 square feet, with a clear ceiling height of 3.2m.
Currently, almost 50% of the commercial tower’s office space and retail units are either leased or in active negotiations. The tower has secured a leading financial services group as its first anchor tenant, which has leased two whole floors. Office occupants are expected to start moving in from June.
Apart from its prime location, Keppel South Central boasts a range of technological improvements that bring it up to par with other Grade-A office buildings in the CBD. These include facial recognition access, 5G Wi-Fi, and an indoor air-quality management system.
Furthermore, the office space has been adapted to support the needs of modern tenants, allowing for after-hours operations. Designated floors are equipped with micro ACUs (air conditioning units) to provide localised cooling when needed, optimising energy usage.
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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, which were not offered in the original Keppel Towers. These facilities are in line with the expectations of Grade-A office tenants and contribute to the overall value of the property, according to Ng.
The tower has been certified by BCA as a Green Mark Platinum Super Low Energy building, marking a significant improvement in energy efficiency and cost savings compared to before its redevelopment. Keppel estimates energy savings of about 6.2 million kilowatt hours (kWh) per year, equivalent to the power consumption of 1,300 homes in Singapore and translating into $1.8 million in annual savings.
To achieve this, Keppel implemented several green solutions that had been tested at another ageing property – Keppel Bay Tower. In 2018, Keppel Land used 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, there is already a huge pool of office buildings built in the 1990s or earlier, and practically all of them are going to fail the new standards for Grade-A office space,” says Ng, adding that without upgrades, 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. With limited new office supply expected, this presents an opportunity for sustainability-focused retrofits.
For Singapore, ageing office buildings are typically redeveloped to recycle prime commercial land in the CBD, says Leonard Tay, head of research at Knight Frank Singapore. He adds, “The completion of projects like Keppel South Central provides fresh office supply at a time when there are no available sites for an office tower development in the core CBD area.”
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.
As Ng explains, Keppel’s in-house capability to execute renewal works helps set them apart from other asset managers. He adds that their operational knowledge allows them to streamline the process of selecting new technologies to implement, resulting in cost savings if the projected savings are not achieved.
Once the fund acquires the asset, Keppel will complete the asset enhancement works, stabilise occupancy, and divest it within the fund’s seven-year lifetime, says Ng. To date, Keppel has applied its SUR initiative to eight projects across five countries. Apart from Keppel South Central and Keppel Bay Towers, completed projects include Park Avenue Central, The Kube, and Saigon Centre. Three projects have yet to be completed: Ocean Financial Centre, Inno88 Tower, and Kohinoor.