Homegrown global asset manager and operator Keppel will pivot its focus to other brownfield redevelopment projects following the completion of Keppel South Central, says Samuel Ng, president of Keppel’s real estate division in Singapore. He adds: “The redevelopment of Keppel South Central is our showpiece.”
He is referring to the former Keppel Towers, a 27-storey office tower completed in 1991, and Keppel Towers 2 (formerly known as GE Tower), a 13-storey building completed in 1993.
Keppel announced the completion of the flagship 33-storey Keppel South Central commercial tower last month. Located along Hoe Chiang Road in Tanjong Pagar, the building will offer about 650,000 sq ft of office retail and event space. Typical office floor plates range between 20,000 and 22,000 sq ft, with a clear ceiling height of 3.2m.
Nearly 50% of the commercial tower’s office space and retail units are either leased or in active negotiations. A leading financial services group has been secured as the first anchor tenant, leasing two whole floors. Office occupants are expected to begin moving in from June.
The tower has retail and event spaces on the ground floor. (Photo: Samuel Isaac Chua / EdgeProp Singapore)
Up to par with other Grade-A offices
The renovated property now houses a suite 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.
The office space was adapted to support the needs of modern tenants, accommodating after-hours operations. Designated floors have been outfitted with micro ACUs (air conditioning units) to provide localised cooling when needed, optimising energy usage when select areas are occupied.
The tower also introduced 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.
Such facilities were absent from the original Keppel Towers and further bring the development in line with what office tenants have come to expect from Grade-A office spaces, says Ng. Furthermore, Keppel has a team in place to activate event spaces across the tower.
“The mobile application users use to connect with facilities and building management can also be used to engage them directly, rather than through the office manager,” adds Ng. “This allows us to gather feedback and host events based on their interests.”
Keppel South Central is a redevelopment of Keppel Towers and Keppel Towers 2. (Photo: Samuel Isaac Chua / EdgeProp Singapore)
Testbed of green technology
Keppel South Central has been certified by BCA as a Green Mark Platinum Super Low Energy building. It marks a significant improvement in energy efficiency and cost savings compared to before its redevelopment.
Keppel estimates energy savings to be about 6.2 million kilowatt hours (kWh) a year, equal to the power consumption of 1,300 homes in Singapore. This translates into about $1.8 million in savings annually.
To achieve this, Keppel incorporated several green solutions they had previously tested at another ageing property — Keppel Bay Tower, which was built in 2002. In 2018, Keppel Land leveraged 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.
“The experience has equipped Keppel with the knowledge to effectively apply those technologies to the various buildings that we own and or operate throughout the world,” says Ng.
The improvements implemented at Keppel South Central range from physical hardware, such as treated external windows to minimise heat transfer into the building, to software applications, such as smart building management systems, to optimise energy usage.
The tower’s redevelopment introduced wellness spaces and shared facilities on the second floor including a swimming pool. (Photo: Samuel Isaac Chua / EdgeProp Singapore)
Brownfield projects in Apac
Keppel is 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 pool 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.
“The challenge, however, is that for every 5 sq ft of demand across Apac, 2 two sq ft of low-carbon space is projected for development from now until 2028,” says Ng. “With limited new office supply expected, this presents a significant opportunity for sustainability-focused retrofits.”
In Singapore, ageing office buildings will typically undergo redevelopment in order for prime commercial land in Singapore’s CBD to be recycled, says Leonard Tay, head of research at Knight Frank Singapore.
He adds: “The completion of projects like Keppel South Central provide 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. “Keppel’s in-house capability to execute the renewal works ourselves helps us stand out from other asset managers,” says Ng.
“Whether it’s an industrial, office or data centre asset, our operational knowledge helps us to streamline the process of selecting which new technologies to implement, thereby saving in capex cost if the projected savings aren’t produced,” he adds.
After the fund acquires the asset, Keppel will be able to complete the asset enhancement works, stabilise occupancy, and divest it within the fund’s life of seven years, 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, a mixed-use office and retail development in Shanghai; The Kube, a four-storey office building also in Shanghai; and Saigon Centre, a mixed-use office and retail development in Ho Chi Minh City.
Three projects have yet to be completed: 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.
