The government has recently announced that the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes will be extended for another five years. These schemes, which were first introduced in November 2019, aim to encourage the conversion of older office buildings in the Central Business District (CBD) into mixed-use developments.
This decision was announced 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 extension of these schemes is intended to inject more homes, increase the population living in the CBD, and introduce a greater mix of uses in the traditionally commercial-centric district.
The CBDI aims to encourage the redevelopment of existing older office buildings in certain areas of the CBD, such as Tanjong Pagar, Robinson Road, and Shenton Way. Meanwhile, the SDI was introduced to stimulate the redevelopment of older developments in strategic areas, including Orchard Road, the CBD, and Marina Centre, in order to bring transformative changes to the surrounding urban environments.
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 received in-principal approval. Construction has already commenced on four CBDI projects in the Anson-Tanjong Pagar area, including Newport Plaza, a mixed-use development on 80 Anson Road consisting of 246 residential units and 198 serviced apartments. The Skywaters Residences, a larger mixed-use development on 8 Shenton Way, will include 190 luxury residential units. Two other commercial developments are also underway at 15 Hoe Chiang Road and 51 Anson Road.
However, Minister Lee notes that the five-year extension of the CBDI and SDI will come with some refinements to both schemes. For instance, the CBDI will now include commercial developments in Anson and Cecil, allowing developers and property owners in these areas to choose to retain their commercial zoning (with 40% non-commercial use) if the redevelopment includes long-stay serviced apartment units. URA has stated that applicants seeking to redevelop in Anson and Cecil must 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 only required to set aside 40% of the new floor area for non-commercial use in order to retain their existing Commercial zoning.
Marcus Chu, CEO of ERA Singapore, says that these incentives aim to make the CBD a place to work, live, and play by promoting the renewal of older buildings in the city center and increasing the number of residential units. Additionally, the revamped CBDI and SDI schemes will now include new sustainability requirements, with all new applications being required to include a sustainability statement that assesses the feasibility of retrofitting part or all of the existing building.
However, Minister Lee also cautions against excessive demolition and rebuilding, especially if the buildings are still relatively young or in good shape. He notes that several projects redeveloped under these schemes have already exceeded the mandated sustainability requirements, such as Union Square, a mixed-use development at Havelock Road that is incorporating a district cooling system.