New bonus GFA incentive scheme for developments which hit certain standards on digitalisation, productivity

UNDER a new 5-year scheme, private developments outside the Government Land Sales (GLS) programme will be able to enjoy up to 3 per cent bonus gross floor area (GFA) beyond the Master Plan Gross Plot Ratio (GPR) if they achieve enhanced standards in productivity, digitalisation, sustainability and quality.

The new scheme will apply to residential, commercial, industrial and institutional as well as mixed-use developments; sites must have a GFA of at least 5,000 square metres (sq m).

"Compared to other bonus GFA schemes, developers have greater flexibility to utilise this bonus GFA within the development," said Minister for National Development Desmond Lee, who announced the Built Environment Transformation GFA Incentive Scheme at the Real Estate Developers' Association of Singapore's (Redas) 62nd anniversary dinner at Marina Bay Sands on Wednesday (Nov 24). "This will support our progressive developers, who proactively push the boundaries."

Meanwhile, the new GFA bonus scheme - which was borne from close consultation with industry stakeholders - will also be extended to GLS sites until Q2 2022, but with bonus GFA of up to 2 per cent. Subsequently, the government plans to raise the minimum requirements for GLS sites where productivity, digitalisation, sustainability and quality are concerned.

Lee added: "Hence, the new bonus GFA scheme will encourage the industry to achieve the enhanced standards before the new requirements take effect."

Commenting on the new scheme, Knight Frank's head of research (Asia Pacific), Christine Li, stressed the need for a multi-stakeholder approach for Singapore’s built environment to commit to the sustainability and digitalisation journey. She told The Business Times: "The incentive scheme will certainly encourage developers and asset owners to redevelop or retrofit older assets to be ESG compliant, although the adoption of the scheme could be challenging in the short term amid labour and material shortages and supply chain disruption.”

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In his speech, Lee also touched on the need to future-proof contracts to address uncertainties in risk allocation arising from pandemics. A new contracts workgroup, consisting of stakeholders from both the public and private sectors, is reviewing contract provisions in standard consultancy agreements and will announce recommendations in time to come.

He also discussed the "new normal" of hybrid work - which will have implications for decentralisation, homes and workplaces - as well as Singapore's ageing population. With respect to the latter, HDB, MND and the Ministry of Health have launched the pilot Community Care Apartments, while plans are being reviewed for a second pilot site.

"We are keen to support private sector models of assisted living and look forward to facilitating developers' innovative proposals," Lee added.

Meanwhile, in his welcome speech, Redas president Chia Ngiang Hong highlighted that the real estate sector faces structural challenges in a post-Covid era.

"We hope the government will continue to maintain a pro-business policy framework while the real estate industry continues to transform and identify growth opportunities for the short and longer term perspective," said Chia. "The government could also assist to build up private sector resilience, allowing flexibility in land use planning in view of the rapidly changing users' requirements as well as more opportunities for companies to participate and collaborate in government projects."

At the anniversary celebration, deputy chairman of Wing Tai Holdings and Redas' past president Edmund Cheng was awarded the REDAS Lifetime Achievement Award while UOL group chief executive Liam Wee Sin was conferred the REDAS Luminary Award.

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