New focus on incorporating long-term serviced apartments as part of city centre developments.

The government has announced the extension of the Central Business District (CBD) Incentive Scheme for another five years, expanding its reach to include the Cecil and Anson areas. Under this new move, developers will now have the option to maintain commercial use in these areas, provided their plans incorporate long-stay serviced apartments. Previously, similar incentives were only available for developments along Tanjong Pagar, Robinson Road, and Shenton Way, where office space could be converted to non-commercial uses, such as residential, as long as 40 per cent of the floor area was repurposed.

Desmond Lee, the Minister for National Development, highlighted this extension during the Real Estate Developers’ Association of Singapore’s (Redas’) Spring Festival lunch on 7th February 2025, explaining that such developments would offer more housing options near workplaces and essential city amenities.

The CBD Incentive (CBDI) scheme, initially launched in 2019, aims to encourage owners of older office buildings to redevelop them into mixed-use spaces. This effort is part of the broader goal to revitalise the CBD, introducing more homes and a vibrant residential population. As an added incentive, owners are permitted to build an additional 25 to 30 per cent of the gross floor area.

Alongside the CBDI, the government also extended the Strategic Development Incentive (SDI) scheme for another five years. This initiative targets redevelopment projects in key locations like Orchard Road, encouraging developers to collaborate and transform entire streets or precincts. Lee reported that both schemes had received strong interest, with several projects already underway in the Anson-Tanjong Pagar area, such as Newport Plaza, The Skywaters, and 15 Hoe Chiang Road. These projects are set to bring over 1,000 new homes, alongside hotels, shops, and dining options.

In addition to these developments, the new schemes will require proposals to include sustainability statements, assessing how retrofitting existing buildings could be integrated into redevelopment plans. Some developers may also need to submit carbon optioneering assessments, which evaluate the environmental impact of different development strategies.

However, the new rental category for long-stay serviced apartments (SA2), introduced in November 2023, has received a lukewarm response from developers. These apartments, requiring a minimum stay of three months, have faced challenges in attracting bids, with recent land sales for such apartments drawing limited interest. Lee encouraged developers to engage in upcoming tenders to diversify Singapore’s rental offerings and cater to the growing demand for such long-term rental options.