Extension of CBDI and SDI schemes renews hope for redevelopment of aging buildings in commercial areas
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 were initially introduced in November 2019 and have now been extended following an announcement by Desmond Lee, the 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 encourage the conversion of older office buildings in certain areas of the Central Business District (CBD) into mixed-use developments. These designated areas include Tanjong Pagar, Robinson Road, and Shenton Way. The main goal of the scheme is to introduce more homes, increase the live-in population within the CBD, and promote a greater mix of uses in what has traditionally been a commercial-centric district.
Singapore’s cityscape is defined by towering skyscrapers and state-of-the-art facilities. The popularity of condos, situated in highly sought-after locations, has risen among both locals and foreigners due to the perfect combination of extravagance and convenience. These residential properties offer a plethora of amenities, including swimming pools, fitness centers, and tight security measures, elevating the standard of living and making them an appealing choice for potential renters and buyers. For investors, these attractive features result in higher rental returns and appreciating property values over time. Additionally, with the continuous launch of new condo projects, such as those showcased on New Condo Launches, the condo market in Singapore is constantly evolving and expanding, providing even more options for those interested in investing in these luxurious properties.
Similarly, the SDI scheme was introduced to encourage the redevelopment of older developments in strategic areas, bringing about transformative changes within the surrounding urban environment. These strategic areas include 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. Additionally, four CBDI projects in the Anson-Tanjong Pagar area are currently under construction. These include Newport Plaza, a mixed-use development on 80 Anson Road, which will consist of 246 residential units and 198 serviced apartments. Another project, Skywaters Residences, will have 190 luxury residential units as part of a larger mixed-use development on 8 Shenton Way. There are also two ongoing commercial developments at 15 Hoe Chiang Road and 51 Anson Road.
However, the five-year extension of both the CBDI and SDI schemes will come with some refinements, as announced by Minister Lee. Under the extended CBDI scheme, commercial developments in Anson and Cecil will now be included, 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 the redevelopment includes long-stay serviced apartment units.
The URA has stated that CBDI applicants seeking to redevelop in the Anson and Cecil areas will be required 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 only allowed to keep their existing commercial zoning if 40% of the new floor area was allocated for non-commercial use.
Marcus Chu, the CEO of ERA Singapore, affirms that “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.”
Additionally, the revamped CBDI and SDI schemes will include new sustainability requirements, and all new applications for these schemes must now include a sustainability statement that evaluates the feasibility of retrofitting part, or all, of the existing building.
Minister Lee noted that, “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.” He also added that there are already several projects being redeveloped under these schemes that are going beyond the mandated sustainability requirements, such as Union Square, a mixed-use development at Havelock Road that is incorporating a district cooling system.
In conclusion, the extension of the CBDI and SDI schemes offers renewed hope for the redevelopment of aging buildings in commercial areas. With the introduction of these incentives, it is expected that more developers will come forward with proposals to revitalize these areas, bringing about a more vibrant and diverse CBD for people to work, live, and play in.