Exploring Asia Pacific’s fastest evolving Central Business Districts

 —  Article by JLL Staff Reporter

Central business districts (CBDs) across the Asia-Pacific region are in an unprecedented state of flux.

With high investment, these heavily populated areas continue to grow and develop to meet ever-changing commercial and human needs. As a result, they are advancing in different and new directions: the CBDs of tomorrow will look vastly different to the commercial districts we have come to know.

However, many CBDs are running out of buildable land space, says Dr Chua Yang Liang, JLL Head of Research for South East Asia. “This is sending developments upwards as well as underground. In addition, CBD boundaries are shifting and some cities are seeing decentralization, where increasingly new office developments are found in the suburbs. Alongside this is a growing push for liveability, with a focus on more efficient transport systems, sustainability and mixed-use buildings.”

Here are eight of the fastest-evolving CBDs in the region.

Beijing

Beijing’s CBD office population doubled between 2008 and 2016, and is predicted to increase at least another 50 percent by 2025. Overcrowding is creating big challenges for Guomao’s already congested transport system. Work has begun on 12 new metro lines meant to ease the strain by 2020.

In addition, congestion charges are being considered. However, with the transport situation unlikely to improve over the next few years, the desire to live closer to offices will increase, sending apartment rental prices higher. Taking all this into account, decentralization could be on the cards for companies in the CBD.

Sydney

In an attempt to provide more commercial opportunities and rein in enthusiasm for residential towers, the City of Sydney is actively encouraging more office and hotel builds. In addition, the plan is to start sending the CBD skyward by boosting the number and height of towers – with the restriction raised from 235 meters to 310 meters. Maintaining green areas is also part of this agenda. Bus transport into the CBD is being reduced, but a new metro line is set to go in. This will reduce Sydney’s existing office space and could push people outward.

Jakarta

Jakarta’s CBD, also known as the Golden Triangle or Segitiga Emas, has seen massive investment over recent years. However, due to the economic downturn and slow demand, the office market has been affected by weak occupancy rates, oversupply and low rent prices, with the average occupancy rate in the CBD at 84 percent in the third quarter of 2016. But a growing trend of e-commerce firms looking for office space in the area offers new hope. The development of the city’s light rail system will also facilitate expansion beyond the core.

Singapore

Up until now, Singapore’s CBD was simply offices and office workers. However the landscape is changing. In line with the government’s Live, Work and Play initiative, mixed-use developments have seen a resurgence, incorporating more health-focused retail, lifestyle and F&B components. To aid traffic congestion, investment is also being poured into cycling infrastructure.

Meanwhile, co-working spaces are popping up to aide collaboration, keep overheads low and avoid long-term lease commitment. To meet demand, decentralization is also occurring, with the Jurong Lake District positioned to be the city’s second CBD.

Shanghai

There are two main trends that are transforming Shanghai’s CBD. First is its vast expansion, which is seeing decentralized clusters widening the existing periphery. The three main areas identified are the Railway Station, North Bund and Pudong Yanggao Road, all located only one or two metro stops away. Second, due to the shortage of available land space, buildings are being pushed underground – the Expo Boulevard is a good example. Qiantan is also being touted as the city’s next CBD.

Melbourne 

Bound by La Trobe Street, Spring Street, Flinders Street and Spencer Street, Melbourne’s city center has seen significant growth in recent years. In 2015, high-rise developments were being built at a rate four times that of some of the world’s highest-density cities. However, due to sustainability concerns, interim restrictions now limit developments to a plot ratio of 24:1. The CBD is also expanding and being pulled west to include Docklands, or the Southern Cross Precinct, an area where large floor plates, new build projects and flexible leasing are drawing tenants.

Phnom Penh

The skyline of Cambodia’s capital is rapidly changing, with the demand for both office and residential space in the central area driving construction. Multiple skyscraper developments are popping up in the CBD – Exchange Square and Olympia City are two of note. The trend here is towards mixed-use properties, with the government keen to include plenty of parks and recreational spaces. Urban infrastructure, such as traffic and drainage systems, is also constantly improving.

Ho Chi Minh City

Vietnam’s economic success is reflected in the skyline of its CBD, which is expanding outward as well as upward. Currently under construction, the six-line Saigon Metro is leading to a profusion of mixed-use developments alongside. It is also set to offer fast access to offices, shops and recreational activities. In addition, a new bridge will link Ho Chi Minh City’s downtown to the up-and-coming new urban center Thu Thiem. Nguyen Hue Street has also been turned into the area’s first landscaped pedestrian zone.

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