CBD Incentive Scheme to breathe life into old buildings

A new CBD Incentive Scheme, announced on 27 March 2019, will encourage existing office buildings in the areas around Anson Road, Cecil Street, Shenton Way, Robinson Road and Tanjong Pagar, to be converted into mixed-use developments, as part of the URA’s plans to rejuvenate the city centre.

The scheme will offer an increase in gross plot ratio (GPR) so that developers can build more units, as reported by Yahoo Finance.

To be eligible, the buildings will have to meet certain requirements—more than 20 years old, a site area of more than 21,528 square feet, and redevelopment plans with residential and commercial components.

Buildings that are not within the designated areas can still propose amalgamations and seek approval for increase in plot ratios and building height through the Strategic Development Incentive (SDI) Scheme.

ZACD Group’s head of research and consultancy, Nicholas Mak, believes this scheme will also be attractive for owners of eligible office developments and ageing retail malls, which will benefit from redevelopment that can inject more vibrancy into the area

Building owners will also have to factor in the costs of redevelopment, including development charges and differential premium payable, as well as the loss of income during the construction period, he added.

Desmond Sim, CBRE’s head of research, Southeast Asia, sees this as an opportunity for landlords and developers to revive their older and underperforming assets.

“The net effect will be a private-sector-led urban regeneration of the CBD,” said Sim. “This also widens options for investors and funds as the gross floor area incentives will effectively enhance their returns.” — Construction+ Online