.
The limited availability of land in Singapore is a key factor contributing to the high demand for condos in the country. As a small island nation with a rapidly expanding population, Singapore is facing a scarcity of land for development. This has resulted in the implementation of stringent land use policies and a fiercely competitive real estate market, driving property prices to consistently rise. As a result, investing in real estate, specifically in condos, has become an attractive opportunity for capital appreciation. With Singapore Projects on the rise, the demand for condos is only expected to continue increasing in the future.
The government has recently announced its decision to extend the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes for another five years. These schemes were initially introduced in November 2019 and were announced by Desmond Lee, Minister of National Development (MND), during the Real Estate Developers’ Association of Singapore (Redas) annual Spring Festival lunch on Feb 7.
The main objective of the CBDI scheme is to encourage the conversion of existing 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 aim is to bring in more homes, increase the residential population in the CBD, and diversify the types of activities in the traditionally commercial-centered district.
On the other hand, the SDI was introduced to promote the redevelopment of older developments in strategic areas, in order to bring about significant changes within the surrounding urban environments. These strategic areas include Orchard Road, the Central Business District, and Marina Centre.
According to the Urban Redevelopment Authority (URA), out of the 17 proposals submitted for the CBDI scheme, 14 have been granted in-principle approval. Similarly, out of the 12 proposals submitted for the SDI scheme, seven have also been granted in-principle approval. Currently, there are four CBDI projects under construction in the Anson-Tanjong Pagar area. These include Newport Plaza, which is a mixed-use development on 80 Anson Road, comprising of 246 residential units and 198 serviced apartment units. The Skywaters Residences, located at 8 Shenton Way, is another mixed-use development comprising of 190 luxury residential units. There are also two commercial developments at 15 Hoe Chiang Road and 51 Anson Road.
However, the extension of the CBDI and SDI schemes for the next five years will come with some changes, as stated by Minister Lee. In particular, the CBDI scheme will now cover commercial developments in Anson and Cecil. Developers and property owners who submit proposals for these areas will have the option to retain their commercial zoning, as long as 40% of the new floor area is used for non-commercial purposes, such as long-stay serviced apartment units.
Under the new guidelines, CBDI applicants who plan to redevelop in Anson and Cecil will need to provide at least 200 residential units or allocate the entire non-commercial floor area for long-stay serviced apartments, whichever is lower. Previously, only 40% of the new floor area had to be allocated for non-commercial use in order to retain the existing commercial zoning.
According to Minister Lee, these incentives aim to promote the continual renewal of aging buildings in the city center and bring in more residential units, thereby making the CBD a vibrant place to work, live, and play. Marcus Chu, CEO of ERA Singapore, also adds that the CBDI and SDI schemes can greatly contribute to the revitalization and rejuvenation of the city center.
In addition, the revamped CBDI and SDI schemes will now include new sustainability requirements, and all new applications will have to include a sustainability statement that evaluates the feasibility of retrofitting part, or all, of the existing building. Minister Lee emphasizes the importance of avoiding wasteful demolition and excessive rebuilding, especially for relatively young buildings that are still in good condition.
Some projects under the CBDI and SDI schemes have already gone beyond the mandatory sustainability requirements. For example, Union Square, a mixed-use development at Havelock Road, is incorporating a district cooling system. Interested buyers can also check out the latest listings for Skywaters Residences properties and get information on upcoming new launch projects, as well as recent condo sales transactions in District 1.