The Singapore government has announced an extension of the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes for another five years. These schemes were first introduced in November 2019 and the decision was revealed by Desmond Lee, Minister of National Development (MND) at the Real Estate Developers’ Association of Singapore (Redas) annual Spring Festival lunch on Feb 7.
The CBDI scheme aims to promote the transformation of older office buildings in designated areas of the Central Business District (CBD) into mixed-use developments. These areas include Tanjong Pagar, Robinson Road, and Shenton Way. The purpose of the scheme is to increase the number of residential units, boost the population living in the CBD, and introduce a more diverse range of uses in the traditionally commercial-dominated district.
On the other hand, the SDI was implemented to encourage the redevelopment of older developments in strategic locations, in order to bring about transformative changes in the surrounding urban environment. The strategic areas covered by this scheme are Orchard Road, the Central Business District, and Marina Centre.
According to the Urban Redevelopment Authority (URA), out of the 17 CBDI proposals and 12 SDI proposals submitted to the government, 14 and seven respectively have been granted in-principle approval. Four CBDI projects in the Anson-Tanjong Pagar area are currently under construction. These include Newport Plaza, which comprises 246 residential units and 198 serviced apartment units, and Skywaters Residences, which consists of 190 luxury residential units in a mixed-use development on Shenton Way. Other developments in the CBD include two commercial buildings on Hoe Chiang Road and Anson Road.
However, Minister Lee has stated that the extension of the CBDI and SDI schemes for another five years will come with some refinements. Specifically, the CBDI will be expanded to include commercial developments in the Anson and Cecil areas. Developers and property owners who submit proposals for buildings in these areas will have the option to retain the commercial zoning if their redevelopment includes long-stay serviced apartment units.
Under the new rules, CBDI applicants seeking to redevelop in Anson and Cecil must provide a minimum of 200 residential units or dedicate their entire non-commercial floor area to long-stay serviced apartments, whichever is lower. Previously, office buildings redeveloped under the CBDI were allowed to keep their original commercial zoning if 40% of the new floor area was dedicated to non-commercial use.
According to the CEO of ERA Singapore, Marcus Chu, these incentives aim to renew aging buildings in the CBD and introduce more residential units, making it a more desirable place to work, live, and play.
Moreover, the revamped CBDI and SDI schemes will now include new sustainability requirements. All new applications for these schemes must include a sustainability statement that assesses the feasibility of retrofitting part or all of the existing building.
Minister Lee explains that while the government supports revitalization and rejuvenation through redevelopment, they do not want to see wasteful demolition and excessive rebuilding, especially if the buildings are still in good condition. He also mentions that some projects under the CBDI and SDI schemes are already exceeding the sustainability requirements, such as Union Square, a mixed-use development on Havelock Road that will incorporate a district cooling system.