SINGAPORE (EDGEPROP) – A JLL research report referring to the Draft Master Plan 2019 (and in particular to the CBD Incentive Scheme) called it “visionary” and “bold”. The Urban Redevelopment Authority (URA) released information about the scheme on March 27, and it offers 25-30% higher plot ratios for owners who convert office buildings over 20 years old to other complementary uses in the CBD such as residential and hotel use.
“The CBD Incentive Scheme is visionary in its scope and bold in the significant plot ratio increases offered.”
JLL thinks this will motivate several owners to convert older buildings into state-of-the-art developments with modern offices, apartments and hotels. The JLL research has also identified over 20 buildings, which may qualify for the CBD incentive scheme.
“These new developments will bring new residents of all ages, tourists and digital nomads into the district, allowing for more 24/7 activities and potentially more restaurants, events and even schools. Sophisticated occupiers now prioritise hospitality, health and lifestyle amenities in their choice of office locations.”
The JLL research noted that Singapore is already the location of choice for regional headquarters, especially for technology companies due to its quality of life and attractiveness for talent, supportive conducive government policies and funding and competitive occupancy costs. It said that it was confident this revitalisation initiative will uplift Singapore’s CBD and further widen Singapore’s lead as a top global city for talent, companies and capital.
JLL believes that the withdrawal of older office stock as envisioned by the CBD Incentive Scheme will also help to accelerate Singapore’s decentralisation strategy to enhance sustainability, reduce commuting and enliven its decentralised gateways.
“Office occupiers displaced by the withdrawal of older office stock in the CBD will need new premises. This gives the government more scope to release land parcels outside the CBD in decentralised gateways such as Jurong East, Woodlands and Tampines to expedite the development of these hubs.
“With limited new supply of office space in the CBD expected and potential initiation of redevelopment projects, we expect CBD office rents to continue to rise over the next five years, barring any demand shocks. This would also likely widen the rental gap between CBD and suburban hubs, and motivate more businesses to consider moving some operations out of the CBD.”
The report said that the CBD Incentive Scheme provides incentives to encourage the conversion of older office buildings in the southern portion of the CBD for complementary residential or hotel uses. The CBD Incentive Scheme covers buildings over 20 years old on sites that meet minimum size criteria and provides for 25-30% higher plot ratio if noncommercial uses are proposed.
The research noted that rezoning and gross plot ratio incentive schemes have worked well in Singapore in the past. It drew attention in particular to how several sites in Bukit Timah were rezoned from Industrial to Residential in the year 1993, to motivate factory owners to redevelop the buildings into condominiums. Higher plot ratios were assigned to these sites and the payment of development charge was waived. Due to this plan, the area was rejuvenated into an exclusive residential enclave close to the city.
The CBD Incentive Scheme also directly and proactively catalyses the reshaping of Singapore’s CBD to address transport concerns and plants the seeds for more integrated live-work-play developments, the research said. This will likely uplift Singapore’s downtown CBD and further widen our lead as a top global city for talent, companies and capital.
“Based on our knowledge of the progress of outline planning proposals submitted by building owners, we think potentially 1.3-1.5 million sq ft of old office stock could be redeveloped over the next five years to take advantage of the CBD Incentive Scheme. We believe this could materially change the office landscape in a few ways.”
URA has earlier said that the objectives of its CBD Incentive Scheme were to:
- Changing global trends are reshaping the way and spaces in which people live, work and play. To attract talent, business districts all over the world are racing to become attractive places that cater to the varied needs of modern lifestyles. Singapore’s Downtown, comprising the Central Business District (CBD) and Marina Bay, is no exception.
- To better support the continued growth and evolution of our CBD as a dynamic global hub, URA is introducing a new set of incentives to reposition our CBD as a 24/7 mixed-use district so that the CBD will not only be a place to work, but also a vibrant place to live and play in.
- The incentives aim to encourage the conversion of existing, older, office developments into mixed-use developments that will help to rejuvenate the CBD by:
– Providing a wider diversity of uses, including more residences, hotels, and creative lifestyle possibilities;
– Realising better connectivity to adjacent developments and transport nodes;
– Creating a more intimate, people-friendly environment with walkable streets and public spaces that will provide an appealing address for people to live and work in.
URA said the incentives are calibrated to encourage:
- The creation of mixed-use neighbourhoods at the CBD fringe areas of Anson and Cecil Street, with greater extent of residential uses supported by a variety of social/community amenities;
- A blend of mixed-uses within Robinson Road, Shenton Way and Tanjong Pagar, while retaining the predominantly commercial character of the core areas of our CBD in Raffles Place.
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