The Singapore government has announced the extension of two incentive schemes – the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) – for another five years. These schemes were introduced in November 2019, and the latest decision to extend them was announced by Desmond Lee, Minister of National Development (MND), at the Real Estate Developers’ Association of Singapore (Redas) annual Spring Festival lunch on February 7.
The CBDI scheme aims to encourage the conversion of older office buildings in select areas of the Central Business District (CBD) into mixed-use developments. These areas include Tanjong Pagar, Robinson Road, and Shenton Way, and the scheme is intended to increase residential options, boost the population in the CBD, and bring a greater mix of uses to the traditionally commercial-centric district.
Meanwhile, the SDI was introduced to encourage the redevelopment of aging buildings in strategic areas, to bring about transformative changes within the surrounding urban environments. These strategic areas include Orchard Road, the CBD, and Marina Centre.
According to the Urban Redevelopment Authority (URA), 14 of the 17 CBDI proposals and seven of the 12 SDI proposals submitted to the government have been granted in-principle approval. Currently, four CBDI projects in the Anson-Tanjong Pagar area are under construction, including Newport Plaza, a mixed-use development on 80 Anson Road that will feature the 246-unit Newport Residences and 198 serviced apartment units. The Skywaters Residences, which comprises 190 luxury residential units as part of a larger mixed-use development on 8 Shenton Way, is another CBD project. The remaining two projects are commercial developments located at 15 Hoe Chiang Road and 51 Anson Road.
However, the five-year extension of the CBDI and SDI schemes will come with some changes, says Minister Lee. Under the new extension, commercial developments in the Anson and Cecil areas will also be covered under the CBDI scheme, and developers and property owners who submit proposals for these areas can opt to retain their commercial zoning – provided that at least 40% of the floor area is used for non-commercial purposes, such as long-stay serviced apartment units.
Prior to this, office buildings redeveloped under the CBDI were allowed to retain their existing commercial zoning if 40% of the new floor area was used for non-commercial purposes. According to URA, CBDI applicants seeking to redevelop in Anson and Cecil will need to provide at least 200 residential units, or set aside their entire non-commercial floor area for long-stay serviced apartment units, whichever is lower.
Marcus Chu, CEO of ERA Singapore, says, “By enabling the continual renewal of the many aging buildings in the city centre, and with the injection of more residential units, these incentives aim to make the CBD a place to work, live and play.”
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In addition, the revamped CBDI and SDI schemes will also include new sustainability requirements. Going forward, all new applications must include a sustainability statement that assesses the feasibility of retrofitting part, or all, of the existing building. “While we support revitalisation and rejuvenation through redevelopment, what we do not want is wasteful demolition and excessive rebuilding, especially if the buildings are relatively young, or still in good shape,” says Lee.
He adds that several projects that are being redeveloped under the CBDI or SDI schemes are already surpassing the mandatory sustainability requirements. For instance, Union Square, a mixed-use development at Havelock Road, will feature a district cooling system.