The government has recently announced an extension of five years for the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes. These schemes were introduced in November 2019 and the decision was unveiled by Minister of National Development, Desmond Lee, 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 certain areas of the Central Business District (CBD) into mixed-use developments. These areas include Tanjong Pagar, Robinson Road, and Shenton Way. The purpose of this scheme is to increase the number of homes, enhance the CBD’s live-in population, and introduce a diverse range of uses in the traditionally commercial-focused district.
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On the other hand, the SDI was introduced to encourage the redevelopment of older developments in strategic areas to bring about transformational changes in the surrounding urban environment. These strategic areas include Orchard Road, the Central Business District, and Marina Centre.
According to the Urban Redevelopment Authority (URA), 14 out of 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 and Skywaters Residences.
However, with the five-year extension of the CBDI and SDI, there will be refinements made to both schemes, as announced by Minister Lee. The CBDI will now include 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% dedicated to non-commercial use, if the redevelopment includes long-stay serviced apartment units.
In order to be eligible for the CBDI, developers 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 allowed to retain their existing commercial zoning if 40% of the new floor area was set aside for non-commercial use.
According to Lee, by promoting the continual renewal of aging buildings in the city centre and introducing more residential units, these incentives aim to transform the CBD into a vibrant live, work and play environment. Marcus Chu, CEO of ERA Singapore, adds, “These incentives aim to make the CBD a place to work, live and play by enabling the continual renewal of the many aging buildings in the city centre, and with the injection of more residential units.”
Moreover, the revamped CBDI and SDI schemes will now include new sustainability requirements. All new CBDI and SDI applications will now need to include a sustainability statement that assesses the feasibility of retrofitting part or all of the existing building.
Lee also highlights that while the government supports revitalisation and rejuvenation through redevelopment, it does not want to see wasteful demolition and excessive rebuilding, especially if the buildings are relatively young or are still in good condition. Several projects being redeveloped under the CBDI or SDI schemes have already exceeded the mandated sustainability requirements, such as Union Square, a mixed-use development on Havelock Road, which is incorporating a district cooling system.