CapitaLand Integrated Commercial Trust - Annual Report 2021

ISLANDWIDE FUTURE OFFICE SUPPLY 17 The net lettable area and TOP dates are preliminary estimates and are subject to change. 18 The acquisition of Central Square by City Developments Limited is expected to complete in 1Q 2022. There may be a long-term reduction of CBD office stock moving forward, as developers and landlords rethink redevelopment plans to leverage on the CBD Incentive (CBDI) and Strategic Development Incentive (SDI) Scheme aimed at older properties. As a result, more urban renewal projects could potentially occur in the next few years. Three redevelopments were announced in 2021. These are the 38-storey Fuji Xerox Towers and the 52-storey AXA Tower under the CBDI Scheme, and the Central Mall site comprising Central Mall, a cluster of conservation shophouses and Central Square 18 under the SDI Scheme, and all are to be redeveloped into mixed-use integrated developments. Fuji Xerox Towers has commenced redevelopment works and will comprise a 46-storey development with office (0.25 million sq ft GFA), retail (0.01 million sq ft GFA), residential and serviced apartments (484 apartments), based on URA provisional permissions. It is expected to complete around 2025/2026. Demand & Vacancy Leasing activity continued to be dominated by renewals and flight-to-quality moves in 2021 2024 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2023 2022 Net Lettable Area (million sq ft) Historical 5-Year Annual Average Supply (2017 - 2021): 1.4 mil sq ft CBD Core CBD Fringe Decentralised Historical 5-year Annual Average Supply (2017 - 2021) Source: CBRE Singapore, 4Q 2021 Source: CBRE Singapore, 4Q 2021 0.1 0.7 0.4 0.04 0.5 0.8 1.3 MAJOR FUTURE OFFICE SUPPLY 17 2022: (1.2 million sq ft) 2023: (1.4 million sq ft) 2024: (1.2 million sq ft) CBD Core N.A. • IOI Central Boulevard Towers: 1,258,000 sq ft N.A. CBD Fringe • Hub Synergy Point: 131,200 sq ft • Guoco Midtown: 667,100 sq ft • 333 North Bridge Road: 40,000 sq ft • Keppel Towers and Keppel Towers 2 Redevelopment: 526,100 sq ft Decentralised • SJ Campus: 211,600 sq ft • Rochester Commons: 195,000 sq ft • One Holland Village: 58,600 sq ft • SP – Labrador Park: 670,000 sq ft and Rochester Commons (195,000 sq ft) in the Decentralised market. New office supply expected to complete in 2023 are Central Boulevard Towers (1.25 million sq ft) in the CBD Core, 333 North Bridge Road (40,000 sq ft) in the CBD Fringe, and One Holland Village (58,600 sq ft) in the Decentralised market. In 2024, supply in the pipeline will include the redevelopments of existing office towers, namely Keppel Towers & Keppel Towers 2 (526,100 sq ft) in the CBD Fringe, and SP Labrador Park (670,000 sq ft) in the Decentralised market. In addition, the redevelopment of Shaw Tower is projected to complete in 2025, as at 4Q 2021. as firms adopted the hybrid work model while assessing their space requirements. There was some downsizing activity on the back of occupiers recalibrating their footprint after adopting hybrid working arrangements as a permanent solution moving forward. However, the prevailing tight vacancy and flight-to-quality continued to support the Grade A market. Firms in the non-bank financial services and technology sectors remain the key demand drivers in the office sector, driving the absorption of significant large-scale availabilities in the CBD Core. Additionally, there has been growing interest in the banking and finance sector to establish a foothold in Singapore as an Environmental, Social and Governance (ESG) Hub. Meanwhile, demand from technology firms was seen across a spectrum, ranging from SMEs to global multinational corporations (MNCs). These industries are anticipated to continue to support office demand. On the other hand, the consumer banking sector continued to contract and activity from co-working firms was relatively muted in 2021. Annual Report 2021 107 Independent Market Review