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The ministries of Finance and National Development yesterday outlined the various measures that government agencies have taken to optimise their use of office space in the Central Business District.

They were responding to a report by Colliers International on Wednesday that was carried in BT yesterday. The property consultant has urged government departments housed in the CBD to rationalise their use of office space and to streamline their operations wherever possible to release much-needed office space for the private sector.

MOF said yesterday that efforts to optimise government space usage have led to several government departments moving out of the CBD.

For example, the Media Development Authority will vacate about 4,000 square metres at MICA Building on Hill Street and URA Centre on Maxwell Road, and move to Fusionpolis at One North within the next two years.

‘PUB has relinquished about 7,000 sq m of space at Singapore Power Building along Somerset Road to occupy the Environment Building this year,’ MOF added. The Environment Building is at Cairnhill/Scotts roads, outside the main Orchard Road belt.

MOF also highlighted cases of government agencies which have found it cheaper and more practical to remain in the CBD but which have nonetheless chosen to downsize the office space they occupy.

Examples include MOF itself, which is housed at The Treasury on High Street, and IE Singapore, located in Bugis Junction’s office tower.

MOF also said that since 1990, the Committee on Office Relocation under the Ministry has overseen all government office relocation projects for ministries and statutory boards to ensure that agencies pick the relocation option that delivers the best value for money.

‘The high rents in CBD will naturally weigh the decision against relocating there,’ MOF observed.

It also highlighted measures put in place to ensure the economical use of office space by government agencies.

For example, ‘when measuring the costs of operations and providing funding, MOF holds agencies accountable for the cost of fixed assets, thus providing agencies with an incentive to downsize and optimise their use of office space’, MOF said.

Colliers in its report had warned: ‘If (Singapore office) rents continue to rise unabated amidst shortage of good-quality office space, Singapore’s drive to be an international financial centre may be undermined and our competitiveness could erode to some extent, as the lack of quality office space will limit current companies’ expansion plans and potentially drive away prospective new entrants into Singapore.’

However, the Ministry of National Development (MND) yesterday said that Singapore is ’still relatively attractive to companies considering expansion in Singapore and to prospective new entrants’.

It cited CB Richard Ellis’ 2006 Global Market Rents report released last month, which ranked Singapore as ‘only the 37th most expensive office location’.

MND also said it is releasing more sites in the H1 2007 Government Land Sales programme which can be developed for office use.

New projects on these sites can be completed ‘as early as within three years’.

Other projects already under construction such as Marina Bay Financial Centre - the first phase of which is slated for completion in 2010 - can also help meet demand for office space.

To meet more immediate demand, Singapore Land Authority will be leasing out suitable vacant state properties for office use in the first half of 2007 which can be quickly refurbished and put to immediate use. Such properties are suitable for uses that do not need prime CBD locations, like backroom support ops for banks, MND said.

Business parks can also meet the office needs of some companies, it added.

Finally, MND said that it expects the property market to make suitable adjustments in supply to cater to the increased demand for offices, such as converting space in the CBD currently used for other commercial purposes to offices.

‘Some building owners who had originally planned to convert existing office buildings in the CBD to residential use may also change or delay their plans and retain their office buildings if the demand for office space continues to grow strongly,’ MND said.

Source : Business Times - 29 Dec 2006