URA sets stage for Cecil Street, Anson Road redevelopments with extension of CBD Incentive scheme
Government makes push to include long-stay serviced apartments in such projects
THE government will be extending the incentive scheme for Central Business District (CBD) redevelopments for another five years, and widening its scope to include the Cecil and Anson areas.
Redevelopments in the two areas will now have the option to retain their commercial use if long-stay serviced apartments are included in the proposals. Previously, proposals under the CBD Incentive (CBDI) scheme for developments in Tanjong Pagar, Robinson Road and Shenton Way were allowed to retain their existing commercial zoning as long as 40 per cent of their office space was converted to non-commercial uses, such as residential.
“This will introduce more options for people who want to live near their workplaces and amenities in the city centre,” said National Development Minister Desmond Lee, speaking at the Real Estate Developers’ Association of Singapore’s (Redas) annual Spring Festival lunch on Friday (Feb 7).
Lee said the ministry had received feedback during industry engagements that extending the incentive scheme to include the CBD fringe areas of Anson and Cecil Street could improve its attractiveness.
Launched in 2019, the CBDI scheme aims to spur owners of older predominantly office buildings to redevelop their CBD properties into mixed-use projects. The idea is to inject more homes and a larger live-in population into the CBD while revitalising the area, and building owners would be allowed 25 to 30 per cent more gross floor area.
The Strategic Development Incentive (SDI) scheme – launched the same year – will also be extended for another five years. The scheme encourages owners of existing commercial buildings in key areas, such as Orchard Road, to team up with their neighbours to undertake a comprehensive redevelopment that would transform the street or precinct.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
In his speech, Lee said both the SDI and CBDI schemes were well-received.
To date, 14 of the 17 CBDI applications and seven out of 12 SDI applications received in-principle approvals.
Works for four CBDI projects in the Anson-Tanjong Pagar neighbourhood – at Newport Plaza, The Skywaters, 15 Hoe Chiang Road and 51 Anson Road – are currently underway. Another two SDI projects at Faber House and Union Square are in progress. “With the completion of all these projects in the coming years, the Anson-Tanjong Pagar area will be transformed into a vibrant mixed-use urban neighbourhood with more than 1,000 new homes, hotels, shops and eateries,” said Lee.
This was Lee’s first attendance at Redas’ Spring Festival lunch in over five years. Speaking at the start of the event, Redas president Tan Swee Yiow said: “With elections rumoured to be just around the corner, we look forward to hosting you, perhaps in a new capacity, at future Redas events.”
The minister added in his speech that under the two updated schemes, redevelopment proposals must include a sustainability statement. The statement will assess the feasibility of retrofitting part of, or the entire, existing building.
Some owners may also be required to submit a carbon optioneering assessment weighing the trade-offs of different development scenarios when submitting their proposals for approval.
“This means that in order to qualify for the incentives, developers and building owners will now need to consider ways to reduce the environmental impact of redevelopment,” said Lee.
Cool reception
The new rental category labelled SA2 for long-stay serviced apartments has been met with cool reception from developers, however.
The first state land sale with an SA2 component at Zion Road drew a single bid of S$1.1 billion (S$1,202 per square foot per plot ratio, or psf ppr) when the tender closed in April 2024. Another plot in Upper Thomson Road had no takers, while a third plot at Media Circle – and the first dedicated to long-term serviced apartments – garnered just one bid at S$120 million (S$460.80 psf ppr) which was rejected for being too low.
Market watchers attributed the poor response to developers being deterred by risks associated with the still-untested rental category, and the locations where the sites were offered.
Introduced in November 2023, such serviced apartments come with a longer minimum-stay requirement of at least three months.
In his speech, Lee highlighted that long-stay serviced apartments were launched to meet rental demand and add more diversity to the range of products available. Sites for long-stay serviced apartments are also available in the government land sales programme this year.
“I encourage you to participate in the tenders for these sites, to bring new products to our rental landscape,” he said.
Copyright SPH Media. All rights reserved.
