When it comes to investing in a condo, securing financing is a crucial component to consider. In Singapore, there are various mortgage choices available, but it’s crucial to understand the Total Debt Servicing Ratio (TDSR) framework. This framework imposes a cap on the amount of loan a borrower can take based on their income and current debt commitments. It is imperative for investors to comprehend TDSR and consult with financial advisors or mortgage brokers to make well-informed decisions about their financing options and avoid over-extending themselves. Additionally, keeping an eye on New Condo Launches can also provide valuable insights for investors looking to purchase a condo and secure financing.
The government has announced the extension of the Central Business District Incentive (CBDI) and Strategic Development Incentive (SDI) schemes for an additional five years. These initiatives were initially launched in November 2019 and were recently confirmed by Desmond Lee, Minister of National Development (MND), during the Real Estate Developers’ Association of Singapore’s (Redas) annual Spring Festival lunch on February 7th.
The CBDI scheme aims to encourage the conversion of older office buildings in certain areas of the Central Business District (CBD), including Tanjong Pagar, Robinson Road, and Shenton Way, into mixed-use developments. Its objective is to increase the number of homes, increase the population living in the CBD, and introduce a more diverse range of uses in the traditionally commercial-centric district.
The SDI was introduced to promote the redevelopment of older developments in strategic areas, in order to drive transformative changes in their surrounding urban environments. These strategic areas include Orchard Road, the Central Business District, and Marina Centre. Interested parties can search for the latest New Launches to stay updated on transaction prices and available units.
According to the Urban Redevelopment Authority (URA), out of 17 CBDI proposals and 12 SDI proposals submitted to the government, 14 CBDI proposals and seven SDI proposals have been granted in-principle approval. Four CBDI projects in the Anson-Tanjong Pagar area are currently under construction, including Newport Plaza, a mixed-use development on 80 Anson Road which will comprise the Newport Residences with 246 residential units and 198 serviced apartment units. The Skywaters Residences will also be part of a larger mixed-use development on 8 Shenton Way and will boast 190 luxury residential units. Other CBD projects include two commercial developments at 15 Hoe Chiang Road and 51 Anson Road.
However, the five-year extension of the CBDI and SDI will come with refinements to both initiatives, as mentioned by Minister Lee. The CBDI will now be extended to include commercial developments in the Anson and Cecil areas. Additionally, developers and property owners who submit CBDI proposals for buildings in these areas will have the option to retain their commercial zoning (with 40% non-commercial use) if the redevelopment includes long-stay serviced apartment units.
According to the URA, CBDI applicants seeking to redevelop in Anson and Cecil will need to provide at least 200 residential units, or reserve their entire non-commercial floor area for long-stay serviced apartment units, whichever is lower. Previously, office buildings redeveloped under the CBDI were allowed to retain their existing commercial zoning if 40% of the new floor area was dedicated to non-commercial use.
“By enabling the continual renewal of the many aging buildings in the city centre, and with the injection of more residential units, these incentives aim to make the CBD a place to work, live and play,” says Marcus Chu, CEO of ERA Singapore.
Minister Lee also mentioned that the revamped CBDI and SDI schemes will include new sustainability requirements. Moving forward, all new CBDI and SDI applications must include a sustainability statement that assesses the feasibility of retrofitting a portion, or all, of the existing building.
“While we support revitalization and rejuvenation through redevelopment, what we do not want is wasteful demolition and excessive rebuilding, especially if the buildings are relatively young, or still in good shape,” says Lee.
He also noted that several projects currently being redeveloped under the CBDI or SDI schemes are already going beyond the mandated sustainability requirements. For instance, Union Square, a mixed-use development at Havelock Road, is incorporating a district cooling system. Interested parties can also check out the latest listings for Skywaters Residences properties to explore upcoming new launch projects, condo sale transactions in District 1, and projects that have obtained TOP recently.