High hotel DC rates threaten to throw a spanner in the works for CBD Incentive Scheme

ON March 27 this year, the Urban Redevelopment Authority (URA) unveiled the CBD Incentive Scheme, offering 25 or 30 per cent additional gross floor area (GFA) to motivate owners of older, predominantly office buildings in some parts of the Central Business District (CBD) to redevelop their properties to mixed-use projects.

The scheme aims to promote a wider diversity of uses - including having more residences and hotels - to liven up the CBD in the evenings and on weekends. It took effect from Nov 27, with the gazetting of URA's Master Plan 2019.

The announcement of the scheme has generated some excitement in the market. Some observers have commented on its potential positive impact on listed landlords including Perennial Real Estate Holdings (for AXA Tower, which it owns jointly with Low Keng Huat and other partners); and on City Developments (for Fuji Xerox Towers and City House). Keppel Land would also qualify for the scheme for its two office towers in Hoe Chiang Road.