Insight Report – Prime Living in Singapore Downtown

Singapore, 09 September 2021 – Over the last decade, Singapore’s Central Business District (CBD) has witnessed a growing trend towards downtown living, catalysed by various developments especially in the Marina Bay. However, the government’s decentralisation drive and the entrenchment of hybrid work practices arising from the pandemic could reduce the relevance and allure of downtown living. EDMUND TIE Research examined the evolution and prospects for downtown living against the vision of a 24/7 downtown, improving connectivity and demand for greater convenience and vibrancy.

The Urban Redevelopment Authority’s (URA) planning intent for the downtown is for it to become more than just an area populated by office towers and transient population. URA envisions the downtown as an area of mixed uses, such as retail, F&B, and residential, which houses a substantial live-in population for a more optimised use of land throughout the week. One planning strategy adopted is through zoning multiple land parcels in the downtown as White sites for future mixed-use developments.

EDMUND TIE’s Head of Research and Consulting, Mr Lam Chern Woon, said: “The multiple uses in White sites complement and synergise one another, and when integrated with or located in close proximity to a Mass Rapid Transit (MRT) station, will result in developments that are more convenient, sustainable, and vibrant for users. The enhancement of the rail network through new MRT lines will substantially enhances connectivity, thereby increasing convenience for people travelling to and from downtown for recreational and visiting purposes in addition to work.”

As part of the Master Plan 2019, URA has also released a set of CBD rejuvenation schemes that seek to renew Singapore’s downtown and transform it into a dynamic 24/7 downtown and global financial hub. One such example is the CBD Incentive Scheme, which allows for development intensification and a wider range of permissible land uses such as residential and hotel for older (at least 20 years) offices located in the downtown.

Differentiating themselves from the prime district homes, downtown developments tend to be larger scale mixed-use developments that are integrated with the various MRT stations. These integrated developments also tend to provide seamless integration of shared spaces, amenities, and services within the development. Notably, the majority of residential options downtown are completed more recently and relatively younger than those in the traditional prime areas. In general, new homes offer the latest in-home designs, layouts, and smart home technology that provide a unified and convenient smart home experience.

Mr Lam added: “The easy access to a plethora of lifestyle, F&B, recreational and cultural options in the downtown translates into relatively smaller units in the downtown as homeowners would typically be spending less time in the homes. For instance, downtown homes are about a third smaller than their traditional prime counterparts.”

Due to the wide range of lifestyle options offered by downtown living, the demographics of downtown residents are quite unique. Almost half of downtown residents are in their 20s and 30s, as comparted to about a quarter of residents in traditional prime areas. Small families are common, as are singles; the latter group form 40% of the residents in the Downtown Core planning area.

Noting the trend in the downtown demographic, Mr Lam said: “A lack of primary and secondary schools in the local area is a possible explanation on why there is a low proportion of families as compared to the traditional prime districts.”

Available ownership data suggests a higher proportion of Housing Development Board (HDB) upgraders and foreigners purchasing properties in the downtown relative to the traditional prime areas. One factor attracting HDB upgraders could be that the units in downtown are more affordable due to the smaller sizes. The higher share of foreigner purchases in the downtown, especially during 2018 to 2020, can be attributed to their higher familiarity with iconic attractions like Singapore Flyer, Marina Bay Sands, and the neighbouring locality.

Commenting on the ownership trends, Mr Lam said: “Although most property purchases are likely to be for investments, there is a growing trend of owners purchasing such properties for own stay, and they could be young professionals looking for a home offering easy access to their workplaces in town. Retirees looking to downsize from their current larger units could form another potential buyer group, in particular for developments that provide easy access to healthcare services and other amenities. The Chinese and Americans are the key foreign buyers scooping up properties in the downtown while the Malaysians and Indonesians are also active buyers.”

Looking ahead, we expect downtown living to become increasingly convenient and vibrant, especially when the adjacent Greater Southern Waterfront gets transformed into a new major gateway and location for coastal urban living. We are sanguine on how mixed-use developments can enrich the quality of a holistic living experience in the new normal. Over the next 3-5 years, we are positive on the growth outlook in the Tanjong Pagar and Bugis/ Beach Road precincts, especially for mixed-use developments that are integrated with the transport node. Backed by growing demand for downtown living and ongoing government efforts to bring about a wider variety of real estate uses in and around the downtown, prime living in Singapore’s downtown is poised to become a lifestyle that is desired by many.

Mr Lam commented: “Tanjong Pagar is already an area of bustling daytime activities and vibrant nightlife. The upcoming and potential redevelopment of AXA Tower and International Plaza respectively could increase the residential population and further add spark to this vivacious hub. Similarly, the cultural Bugis precinct can expect a new injection of life in the near term, arising from the upcoming Guoco Midtown and The M projects, both mixed-use developments that are integrated with or in close proximity to the Bugis MRT station.”

ENDS