Investment Sales and Transactions In 2023, a mixed-use site at Tampines Avenue 11 was awarded to a consortiumcomprising CapitaLand, UOL Group and SingLand for S$1.206 billion (S$885 per sq ft ppr). The development will comprise residential and commercial components, integrated with a bus interchange, a community club and a hawker centre. Integrated Development Market Outlook Going forward, the increasing presence of integrated developments will continue to be spearheaded by the change of dynamics in the urban landscape as well as government initiatives such as planning policies that encourage more mixed-use and integrated development precincts. This is in tandem with URA’s strategy to develop sub-regional centres to decentralise commercial activities to locations outside of the CBD, coupled with the resilience of suburban areas in light of the pandemic. The demand for prospective integrated development land sites is anticipated to intensify with greater interest from developers with scale and experience across different uses, or a consortium of developers specialising in different components. The release of “white site” under the GLS Programme such as at Woodlands Avenue 2 and mixed-use development site at Tampines Street 94 will provide potential opportunities for developers to conceptualise such developments. The quality of integrated developments is expected to continue improving with more diverse offerings, better programming and better public spaces for users. Developers/landlords of non-integrated developments will need to continually innovate and invest in technology and enhance their placemaking efforts, to improve their services and offerings within their developments as the integrated development market becomes more competitive. 17 Oxford Economics, January 2024 18 Federal Statistical Office Germany FRANKFURT OFFICE MARKET The Frankfurt economy in 2023 was impacted by global uncertainties and a mild recession in Germany. The city's GDP which was forecasted to grow by 0.7%17 in 2023, held up better than that of -0.3%18 for Germany as a whole. GDP growth is likely to remain subdued in 2024. The Frankfurt economy in 2024 is expected to be weighed down by a significant contraction in the financial sector, which is a major component of Frankfurt’s economy, as well as declines in professional and public services. According to the Federal Employment Agency, the unemployment rate in Frankfurt increased slightly from 5.7% in December 2022 to 5.9% in December 2023. Consumer prices in Germany rose by 5.9% in 2023 on an annual average basis compared with 2022. The Federal Statistical Office (Destatis) reported that the inflation rate for 2023 was thus lower than in the previous year, which stood at 6.9%, as a result of monetary policy interventions18. In line with the current economic situation, take-up and investment figures in the Frankfurt market declined in 2023. Office take-up for the overall market totalled 348,100 sq m, a further 6% down on the previous year's take-up of 369,000 sq m. Take-up in 2023 was approximately 26% lower than the 10-year average of 467,500 sq m. This marked the weakest annual total since 2020 (319,600 sq m). The majority of take-up is attributable to small and medium-sized office spaces. 38% of the office take-up accounted for small spaces of up to 1,000 sq m, 42% for spaces in the medium segment of 1,000 to 5,000 sq m and only 20% for spaces over 5,000 sq m. The two largest lettings of the year (by size) are a pre-let of 11,900 sq m by an industrial service provider in a new building completed in 2023 in the Airport District submarket and a pre-let of 10,600 sqmby a Germanbanking institution in a building currently undergoing sustainability refurbishment in the Eschborn submarket. Many occupiers, especially in the large size segment, adopted a wait-and-see approach. Economic uncertainties and the importance of ESG criteria and home-office quotas are influencing and delaying occupiers' decisions on location, space sizes and office concepts. This is also reflected in the number of lease renewals, which at around 200,000 sq m is almost 40% above the 10-year average. The average length of lease extension for these occupiers was five years. FRANKFURT, GERMANY 108 CAPITALAND INTEGRATED COMMERCIAL TRUST INDEPENDENT MARKET REVIEW
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