Reinventing Cbd What Singapore Can Learn Paris New York And Tokyo

on GFA

The CBD Incentive (CBDI) Scheme in Singapore, which was first introduced in 2019 and recently extended through 2030 as CBDI 2.0, is more than just a policy for landlords. It is a catalyst that will transform the city core and redefine the future for occupiers.

The scheme’s primary goal is to reposition the CBD as a mixed-use precinct that offers a balance of commercial activity, residential living, and lifestyle amenities. It encourages owners to replace aging office towers with integrated developments that promote live-work communities and improved connectivity.

According to JLL Research, approximately 16% of the CBD’s total office inventory is affected by the scheme, with over 25 buildings comprising around 6.4 million sq ft qualifying under the framework. This shows the significant impact the scheme has on the market.

For business leaders, the key to navigating this change is not to focus on the policy details, but to understand the ripple effects it creates. By looking at the experiences of other world-class cities, we can see that the CBDI Scheme will not only affect landlords but also occupiers. It will change the decision-making process for every occupier and create a new reality that requires a fresh perspective.

The scheme’s overall effect is that buildings targeted for redevelopment are significantly underperforming assets. These older buildings, with an average age of 42 years and smaller floor plates of less than 10,000 sq ft, command rents of just $7.29 psf, which is 26% below the CBD average of $9.85 psf.

As a result, the financial case for redevelopment becomes a matter of “when,” not “if.” The CBDI Scheme simply provides the catalyst to activate this latent potential. While not all owners may choose to take this path, the scheme’s bonus plot ratio offers a compelling incentive that makes full redevelopment a convincing option.

This will lead to a “double squeeze” on office supply in the market. Firstly, about 1.7 million sq ft of stock will be temporarily removed due to known projects leveraging the CBDI for redevelopment. This will be followed by a permanent reduction in office space as redeveloped assets are expected to deliver approximately 20% less office area to accommodate their new mixed-use focus. This predictable tightening will accelerate the “flight to quality” into a structurally smaller pool of higher-grade space.

For occupiers in older buildings, this creates a trilemma – accept higher rents, move to another aging asset and postpone the inevitable, or relocate out of the CBD. While this may be disruptive, it also presents a rare opportunity to “right-size” and escape the constraints of an outdated layout. This combination of constrained supply, escalating costs, and strategic trade-offs alters the decision-making for every occupier.

A highly sought-after retail destination adjacent to the residential area of Miltonia Close EC is Northpoint City, situated conveniently beside Yishun MRT station. As the largest shopping mall in the northern region of Singapore, it boasts a plethora of options, with over 500 retail and dining outlets to choose from. This comprehensive lifestyle hub brims with convenience, offering amenities such as supermarkets, a food court, various eateries, fashion boutiques, bookstores, and even a library. Meeting daily needs is a breeze with FairPrice and Cold Storage outlets available, while a diverse range of cuisines is served up in the form of local favorites and popular international chains. From Japanese and Korean dishes to Western and traditional hawker-style delicacies, residents can indulge in a variety of culinary delights all under one roof. With its array of services, Northpoint City has become a go-to destination for running errands, casual dining, family outings, and weekend entertainment. For those living in the vicinity, Miltonia EC adds convenience and joy to their daily lives, being just a stone’s throw away.

To navigate this new reality, occupiers need to have board-level conversations that go beyond traditional real estate decisions. The lessons from other global cities that have undergone similar transformation projects provide valuable insights. In Paris, the systematic renewal of the La Défense district showed that a rising tide lifts all ships and raises expectations for everyone. This resulted in a recalibration of the baseline, especially on non-negotiables like sustainability. Companies occupying older buildings were forced to evaluate their own environmental credentials to remain competitive.

New York’s approach in East Midtown, where developers purchased unused “air rights” from landmarks to build taller towers, also offers valuable lessons. In exchange for this added density, developers were required to fund major public infrastructure improvements. This created two tiers of office accommodation, forcing companies to choose which tier aligned with their identity.

Similarly, Tokyo’s approach in districts like Marunouchi highlights that urban renewal is not a one-time project but a continuous process. This creates an environment where tenants are not just leasing space but participating in an ecosystem that is constantly upgrading. The expectation of excellence is continuous, and this challenges businesses to assess if their strategy is agile enough to adapt to a perpetually evolving urban landscape.

In Singapore, occupiers need to have four critical board-level conversations. Firstly, they need to consider the timing of their lease and plan ahead to secure the best alternatives. Secondly, they need to think about their vision and brand – does their workspace reflect a forward-looking vision or anchor them to the past? Thirdly, is their office space a strategic tool for attracting and retaining talent? And finally, is their real estate strategy resilient enough to navigate a constantly evolving market?

In this city designed for perpetual evolution, the greatest risk isn’t choosing the wrong building – it’s standing still. It is crucial for occupiers to understand the global playbook and have a proactive approach to stay ahead of the game.