TWENTY years ago, Jurong East was one of the three regional centres identified under Concept Plan 1991, as part of a decentralisation strategy to sustain Singapore's growth.

New enclave: Paya Lebar Central (artist's impression, above) is envisioned to be a fringe commercial hub for a mix of office, retail and hotel uses. Jurong Lake District is said to be the biggest commercial hub (with a lakeside setting) outside the city centre

While the Central Business District (CBD) and Marina Bay would remain as the financial centre, new commercial hubs would be developed outside the city centre to provide more choices of business locations and to bring jobs nearer to homes. Decentralisation would also help alleviate traffic and infrastructure congestion in the city centre. The other two regional centres announced then were Tampines and Woodlands, located at strategic eastern and northern corridors of the island.

Seventeen years later in April 2008, the Government announced a blueprint to transform Jurong Lake District and Paya Lebar Central into thriving commercial hubs over the next 10 to 15 years.

There were sceptics who thought that Singapore was too small to have several decentralised business hubs, and that traditional stigmas - of Jurong being an industrial enclave and of Paya Lebar's mixed piecemeal developments - would remain. After all, there is a prestige factor attached to businesses with a city centre address - at a cost which companies are willing to pay.

The Government, having a grand vision for both areas, highlighted strategic advantages. For Jurong Lake District, size matters. It comprises two unique complementary precincts - Jurong Gateway and Lakeside. Together, they occupy 360 hectares of land and waterbody - about the size of Marina Bay.

Jurong Lake District is said to be the biggest commercial hub (with a lakeside setting) outside the city centre. Served by the Jurong East, Chinese Garden and Lakeside MRT stations, the area will not only potentially have offices, hospitals, hotels and retail malls, but also worldclass learning and leisure destinations such as the new Science Centre, waterfront boardwalks and parks.

Separately, Paya Lebar Central is envisioned to be a smaller fringe commercial hub for a mix of office, retail and hotel uses. With a much smaller land area of 12 ha, it may not have a lush landscape or scenic lakefront attractions, but its prized location at the fringe of the city centre will allow quick access to the CBD. This locational advantage is key to why other areas such as One North/Buona Vista, Novena and Harbourfront have thrived.

The vision is fantastic, but the plan will need the involvement of private developers and huge capital investments, for it to work. Will there be takers?

In November 2008, the Urban Redevelopment Authority (URA) released a plum white site in Jurong Lake District for sale. It could not have come at a worse time, during the global financial crisis. Fortunately, the crisis was short lived, with Singapore's economy bottoming out in 2009 and rebounding strongly in 2010.

In April 2010, the same site was triggered for sale. The tender attracted six bidders and Australia-listed property group Lend Lease edged out the rest with a price of $749 million or $650 per square foot per plot ratio (psf ppr). The group recently revealed its plan to develop an 818,000 square foot retail mall called Jem on the site, together with a 345,000 sq ft office tower which has been 100 per cent leased to the Ministry of National Development (MND), Building & Construction Authority and the Agri-Food and Veterinary Authority.

This year, a 195,000 sq ft white site next to Lend Lease's site was launched and subsequently sold to CapitaMalls Asia, CapitaMall Trust and CapitaLand for $969 million or $1,012 psf ppr after a bidding exercise involving five parties. The purchase price represented a 55 per cent hike over Lend Lease's bid in 2010.

Jurong Gateway's initial launches were successful in attracting private sector participation. More sites are expected to be launched in 2012. This success has spurred the Government to test the waters over at Paya Lebar Central.

In January this year, a 159,868 sq ft commercial site at Paya Lebar was offered for sale. The site saw a near record turnout of 10 bidders, and was eventually won by a consortium led by construction group Low Keng Huat at a price of $586 million ($872 psf ppr). Among the bidders were a slew of non-property players including OSIM's Ron Sim and JL Asia Resorts (owner of K Box Entertainment) in various joint ventures, all hoping to enjoy first-mover advantage in the area.

A second site in Paya Lebar Central has been launched, awaiting bids when the tender closes on Oct 18. Despite the re-emergence of global economic dark clouds, we are expecting an enthusiastic turnout by developers in a market flush with liquidity and record low interest rates.

Suburban attractions

There are reasons why developers are attracted to suburban commercial and mixed-use projects.