When it comes to real estate investments, location plays a crucial role, especially in Singapore. Condos located in central areas or in close proximity to important amenities like schools, shopping centers, and public transport hubs have a higher tendency to appreciate in value. The condos in Orchard Road, Marina Bay, and the Central Business District (CBD) are prime examples of such locations, where property values have consistently shown growth. Moreover, families are drawn to these areas due to their condos’ close proximity to reputable schools and educational institutions, making them even more desirable and increasing their investment potential.
The CBDI and SDI schemes, introduced by the government in November 2019, have been extended for another five years. At the Real Estate Developers’ Association of Singapore (Redas) annual Spring Festival lunch on Feb 7, Desmond Lee, Minister of National Development (MND), announced the decision.
The CBDI scheme aims to encourage the conversion of older office buildings in certain CBD areas, such as Tanjong Pagar, Robinson Road, and Shenton Way, into mixed-use developments. This is intended to bring more homes, boost the live-in population in the CBD, and introduce more variety in the traditionally commercial-centric area.
The SDI, on the other hand, was introduced to promote the redevelopment of older developments in strategic areas like Orchard Road, the CBD, and Marina Centre, in order to stimulate transformative changes in the surrounding urban environment.
Based on information from the Urban Redevelopment Authority (URA), 14 out of 17 CBDI proposals and seven out of 12 SDI proposals submitted have received in-principle approval from the government. Among these, 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 consists of the 246-unit Newport Residences and 198 serviced apartment units. Another project, The Skywaters Residences, will have 190 luxury residential units as part of a larger mixed-use development on 8 Shenton Way. Other CBD projects include two commercial developments on 15 Hoe Chiang Road and 51 Anson Road.
Minister Lee has announced that the five-year extension of the CBDI and SDI programs will come with improvements to both schemes. The CBDI will now cover commercial developments in Anson and Cecil, giving developers and property owners the option to maintain their commercial zoning (with 40% non-commercial use) when redeveloping buildings in these areas, as long as long-stay serviced apartment units are included.
According to the URA, CBDI applicants who wish to redevelop in Anson and Cecil must provide a minimum of 200 residential units or allocate the entire non-commercial floor area for long-stay serviced apartments, whichever is lower. Previously, office buildings redeveloped under the CBDI were allowed to keep their existing commercial zoning as long as 40% of the new floor area was used for non-commercial purposes.
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.”
Furthermore, the revised CBDI and SDI schemes will include new sustainability requirements, and all new applications must include a sustainability statement assessing the possibility of retrofitting part or all of the current 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 also adds that several projects undergoing redevelopment under the CBDI or SDI schemes have already exceeded the compulsory sustainability requirements. For instance, Union Square, a mixed-use development on Havelock Road, is integrating a district cooling system.
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In conclusion, the government’s decision to extend the CBDI and SDI schemes for another five years is aimed at rejuvenating and revitalising the city centre through the redevelopment of aging buildings, while promoting sustainability and injecting more homes into the CBD.