The Singapore government has recently announced an extension of the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes for another five years. These schemes were first launched in November 2019 and have been successful in revitalizing the city’s central business district.
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Desmond Lee, Minister of National Development (MND), made the announcement at the annual Spring Festival lunch of the Real Estate Developers’ Association of Singapore (REDAS) on Feb 7. The CBDI scheme was introduced to encourage the conversion of older office buildings in certain areas of the Central Business District (CBD) into mixed-use developments. These areas include Tanjong Pagar, Robinson Road, and Shenton Way.
The main aim of the CBDI scheme is to increase the number of homes in the CBD, attract more residents to live in the area, and introduce a more diverse range of uses in the traditionally commercial-focused district. Meanwhile, the SDI was introduced to encourage the redevelopment of older developments in strategic areas, with the goal of transforming the surrounding urban environment. The strategic areas identified are Orchard Road, the Central Business District, and Marina Centre.
According to the Urban Redevelopment Authority (URA), 14 out of 17 CBDI proposals and seven out of 12 SDI proposals submitted to the government have been granted in-principle approval. Four CBDI projects in the Anson-Tanjong Pagar area are currently under construction, including Newport Plaza, which will feature 246 residential units and 198 serviced apartment units. The Skywaters Residences, a mixed-use development on 8 Shenton Way, will include 190 luxury residential units. Other CBD projects include two commercial developments at 15 Hoe Chiang Road and 51 Anson Road.
However, the five-year extension of the CBDI and SDI schemes will come with some adjustments, according to Minister Lee. The CBDI will now cover commercial developments in Anson and Cecil, and developers and property owners who submit proposals for buildings in these areas will have the option to retain their commercial zoning (with 40% non-commercial use) if they include long-stay serviced apartment units in the redevelopment.
The URA states that CBDI applicants seeking to redevelop in Anson and Cecil will need to provide at least 200 residential units or allocate their entire non-commercial floor area for long-stay serviced apartments, whichever is lower. Previously, office buildings redeveloped under the CBDI were allowed to retain their existing commercial zoning if they set aside 40% of the new floor area for non-commercial use.
Marcus Chu, CEO of ERA Singapore, believes that these incentives will further enhance the CBD and make it a more vibrant place to work, live, and play. The revamped CBDI and SDI schemes will also incorporate new sustainability requirements, and all future applications must include a sustainability statement that assesses the feasibility of retrofitting part or all of the existing building.
While the government supports the revitalization and rejuvenation of the CBD through redevelopment, they also want to avoid wasteful demolition and excessive rebuilding, especially for relatively young or well-maintained buildings, explains Minister Lee. He cites the example of Union Square, a mixed-use development on Havelock Road, which is incorporating a district cooling system.