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Keppel to shift focus to brownfield projects post-Keppel South Central completion
Keppel, a homegrown global asset manager and operator, has announced that it will be pivoting its focus to other brownfield redevelopment projects following the successful completion of Keppel South Central.
According to Samuel Ng, the president of Keppel’s real estate division in Singapore, Keppel South Central is the company’s showpiece. The redevelopment of the former Keppel Towers and GE Tower, completed in 1991 and 1993 respectively, is a 27-storey commercial tower offering about 650,000 sq ft of office, retail, and event space.
While nearly 50% of the commercial tower’s space is already leased or in active negotiations, the leading financial services group has been secured as the first anchor tenant, leasing two whole floors. The office occupants are set to move in from June while the ground floor already has retail and event spaces and the fifth and sixth floors have health and wellness spaces.
The building is equipped with facial recognition access, 5G Wi-Fi, and an indoor air-quality management system, making it a Grade-A office building that meets the standards of modern tenants. It also offers designated floors with micro ACUs (air conditioning units) to provide localised cooling and facilitate after-hours operations, making it energy-efficient.
Keppel South Central has also been certified by BCA as a Green Mark Platinum Super Low Energy building. It is expected to save about 6.2 million kilowatt hours (kWh) per year, equivalent to the power consumption of 1,300 homes in Singapore, and $1.8 million annually. Some of the improvements incorporated are treated external windows to minimise heat transfer, a smart building management system, and other green solutions that will improve energy efficiency.
Keppel, through its Sustainable Urban Renewal (SUR) strategy, is looking to replicate the success of Keppel South Central across the region. In Asia Pacific alone, 87% of occupiers are looking to comprise their portfolio with entirely green-certified properties by 2030. Hence, SUR strategy offers a significant opportunity for sustainability-focused retrofits. In Singapore, Keppel Bay Tower, the city’s first zero-energy commercial building, was completed in 2020.
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. So far, Keppel has applied its SUR initiative to eight projects across five countries, with three projects still ongoing. Additionally, the company has the capability to execute the renewal works itself, making it stand out from other asset managers. After the fund acquires the asset, Keppel will complete the asset enhancement works, stabilise occupancy, and divest it within the fund’s life of seven years.
With limited office supply expected in the Asia Pacific, Keppel plans to develop new projects across commercial, living, life sciences, hospitality, and logistics segments in Singapore, South Korea, Japan, Australia, and first-tier cities in China. Through its experience with Keppel South Central, the company aims to recycle prime commercial land and offer fresh office supply at a time when there are no available sites for an office tower development in the core CBD area.
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The completion of Keppel South Central will bring in a new wave of Grade-A office spaces, offering facilities and services that tenants expect. The company’s presence in the region will help it identify other ageing office buildings and upgrade them to meet modern standards, increasing their capital values and potential marketability.