URA Rejects International Plaza's Application For CBD Incentive Scheme
SINGAPORE – International Plaza’s ongoing S$2.7 billion collective sale will likely be affected after the Urban Redevelopment Authority (URA) rejected the development’s outline application for a proposed redevelopment under the CBD Incentive Scheme, reported The Business Times on Monday morning (1 November, SGT).
When the mixed-use development’s tender was launched last month, marketing agent Edmund Tie & Co stated that International Plaza meets the scheme’s qualifying criteria in terms of site area, current land use, and building age.
When asked regarding this, a URA representative told The Business Times that the qualifying criteria only provide a framework to guide the detailed assessment whether a project is eligible for the CBD incentive, but the government agency will still need to consider specific site context and existing ground conditions.
At present, International Plaza already has a good mix of uses, which consist of office space, residences, retail, food & beverage (F&B) and personal services.
“Hence, even without redevelopment under the CBD Incentive Scheme, International Plaza is already in line with the planning intention, and is in fact functioning as an amenity centre for the area,” noted the URA spokesperson.
“Unlike most mono-use office-centric developments in the CBD, International Plaza has a good mix of uses, including a significant residential component that occupies more than 20 percent of the total building floor area,” stated the URA in a note published in early October that explained its refusal to grant written permission for International Plaza’s outline application.
In addition, the spokesperson pointed out that the project’s existing building intensity of 19.24 gross plot ratio is “substantial and considerably higher than the surrounding developments” in Tanjong Pagar like Twenty Anson, Guoco Tower and Springleaf Tower,
“Taking these into consideration, we have assessed that the development is not eligible for the CBD Incentive Scheme,” she concluded.
Notably, International Plaza’s present plot ratio of 19.24, which is based from its nearly 1.45 million sq ft existing GFA, is significantly more than the 10.5 plot ratio allocated for the commercial-zoned site under the 2019 Master Plan.
Market watchers shared that URA’s rejection means that International Plaza won’t benefit from the additional 25 percent gross floor area (GFA) under the CBD Incentive Scheme. Consequently, the project’s S$2.7 billion reserve price translates to a higher land rate of roughly S$2,448 psf ppr instead of S$2,170 psf ppr.
Both land rates are inclusive of payment to the government to refresh site’s lease to 99 years from the remaining leasehold term of about 47.5 years, in addition to paying a differential premium for intensification and/or change or use if applicable.
Still, Karamjit Singh, CEO of property investment sales specialist Delasa, believes that the URA’s rejection of International Plaza’s application under the CBD incentive scheme is unlikely to impact other office buildings applying for the scheme.
“International Plaza is unique in that it’s massive, built well over Master Plan, and it has a reasonably-sized residential component,” he said, adding that the CBD incentive scheme is targeted at ageing developments that are predominantly used as office space.