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We check out the various business parks in Singapore, how they differ, and what kind of businesses are suited for specific business parks.
Despite its small size, Singapore is a world-class city, and is the preferred hub for many foreign companies keen on establishing their business or consolidating their business in the region. In order to meet a wide range of economic needs, the government has been working on developing the city centre, the suburban areas, and subsequently, across the entire country.
As a result, a large number of business parks in many different locations have been established over the past decade – the available business park space (occupied and unoccupied) has been steadily increasing since Q3 2002, from approximately 6.8 million sq ft to 17.2 million sq ft in Q2 2014, and moving forward, the government promises that more land will continue to be set aside for the various business sectors to expand.
This approach will ensure Singapore maintains its vibrant commercial and business-friendly environment and is attractive to both residents and investors. In addition, there will be greater emphasis on decentralisation, with existing growth centres outside the city centre continuing to be strengthened. New growth areas in even more locations will also be introduced to offer businesses alternative options for space.
Over the past couple of years, the government has progressively developed commercial clusters islandwide such as Tampines Regional Centre, Novena, one-north at Buona Vista and Changi Business Park.
So what exactly is a business park, and what kind of business is suited for which business park? And what differentiates one business park from another? We find out.
“According to JTC Corporation, business parks refer to areas for non-pollutive industries and businesses that engage in high-technology, research and development (R&D), high value-added and knowledge-intensive activities. Hence, businesses suited for business parks include a wide range of light and clean uses such as R&D, data centre, information technology, telecommunications, electronics, healthcare devices, product design, development and testing, technical support helpdesk, service centres and back-end operations of financial institutions,” said Chia Siew Chuin, Director of Research & Advisory, Colliers International.
Here’s a look at some of the business parks in Singapore.
Seletar Aerospace Park
Seletar Aerospace Park (SAP) provides an integrated and conducive environment for aerospace companies to operate and collaborate within. The 320ha development comprises land and purpose-built infrastructure, out of which 160ha of land are dedicated for the use of the aerospace industry, with the remaining occupied by Seletar Airport.
The upgraded Seletar Airport has been designed to support business and general aviation activities, including a 1,836-metre runway, aircraft parking areas and engine run-up bays.
SAP also hosts an integrated cluster of activities including Maintenance, Repair and Overhaul (MRO) of aircrafts and components; manufacturing and assembly of aircraft engines and components; business and general aviation; training and research & development.
Tuas Biomedical Park
Tuas Biomedical Park (TBP) is a world-class manufacturing hub, hosting process development and manufacturing operations of major pharmaceutical, biotechnology and medical technology companies.
Home to a host of global biomedical players including GlaxoSmithKline, Lonza, MSD GmbH, Novartis, Pfizer and Roche, these leading global biomedical companies have invested in about 20 commercial-scale facilities in Singapore, which houses process development operations and manufacture of active pharmaceutical ingredients (APIs) and novel medicines.
Changi Business Park
Strategically located in a beautifully-landscaped environment that is supported by an energy-saving District Cooling System, Changi Business Park (CBP), which comprises an eight-storey east wing and a six-storey west wing interlinked by a five-storey atrium, is a natural choice for high-technology businesses, data and software enterprises, research and development divisions of multinational companies and knowledge-intensive enterprises.
Some of the world’s leading companies at CBP include Honeywell, IBM, Invensys, Ultro Technologies, Xilinx and financial institutions such as DBS Bank, Citibank, Credit Suisse and Standard Chartered Bank.
CleanTech Park
Developed with emphasis on retaining the natural environment and biodiversity of the area, CleanTech Park is Singapore’s first eco-business park. Featuring over 37,000 sqm of space, this green park is part of a concerted effort between JTC and the government to drive the clean technology industry in Singapore and encourage more businesses to embrace sustainability.
Some of the companies that have set up their base here include Japan-based Toray Industries, the world’s largest producer of carbon fiber, which has established its Toray Water Technology Laboratory (TWTL) at CleanTech Park to conduct research and development of water-treatment technologies; and Nanyang Technological University (NTU)’s research institutes in energy and water research, namely the Nanyang Environment & Water Research Institute (NEWRI), and the Energy Research Institute @ NTU (ERI@N).
Advantages of operating from a business park
According to analysts, lower rental costs are the main factors attracting companies to set up their operations in a business park. A table illustrating rental comparisons of office space alternatives is as follows:
Type of property Median rentals $ psf pm (Oct 2013 – Oct 2014)
Business park space $4.18
Office space (suburban) $4.74
Office space (Grade ‘A’) $10.95
Office space (Central) $6.51
Source: Singapore Property Watch (SPW), Urban Redevelopment Authority of Singapore (URA), JTC, CBRE Research (Q3 2014)
Apart from lower rental costs, other factors that are driving companies to business parks include greater convenience, accessibility and increase in productivity levels by working closer to homes.
According to news reports online, several prominent agencies, banks and other financial institutions such as DBS Bank, Credit Suisse, and Deutsche Bank have relocated their backroom operations to Changi Business Park and Alexandra Technopark for the purposes of risk diversification and cost savings. Most of these organisations have taken the lead in bringing jobs closer to homes. Furthermore, with prime office rents expected to continue rising next year, an office space in a business park is increasingly seen as an attractive alternative.
Positive outlook for business parks in 2015
A DTZ report revealed that business park rents continued to rise in Q3 2014, and is expected to continue its upward trend in 2015.
Cheng Siow Ying, DTZ’s executive director of business space, said compared to office rents, the lower business park rents are drawing more office occupiers so the trend will last for some time. “The difference in rents can be as high as 30 percent, compared with the average office rents in the decentralised areas.”
She added that those occupiers comprise startup companies or office tenants strategically relocating to take advantage of lower rents, and information technology (IT) firms expanding their operations.
Image: Artist’s impression of CleanTech Park, Singapore’s first eco-business park. (Photo by JTC)
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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