Reinventing Cbd What Singapore Can Learn Paris New York And Tokyo

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The CBD Incentive (CBDI) Scheme in Singapore was first launched in 2019 and has recently been extended through 2030 as CBDI 2.0. It is not just a policy for landlords, but a catalyst that will redefine the future of occupiers in the city’s core.

The scheme’s transformative vision aims to reposition the CBD as a mixed-use precinct that functions round-the-clock, balancing commercial activities with residential and lifestyle amenities. It encourages owners to replace ageing office towers with integrated developments that promote live-work communities and enhance connectivity.

Based on JLL Research, the scheme impacts 16% of the CBD’s total office inventory, with over 25 buildings, comprising approximately 6.4 million sq ft, qualifying under its framework. For business leaders, the key to navigating this change is not to focus on the policy details but to understand its ripple effects.

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The experiences of other world-class cities that have undergone similar transformations offer a valuable playbook for anticipating and leveraging the changes brought about by the CBDI scheme.

Transforming Landlords’ Incentives into Occupiers’ Reality

The logic behind this transformation is compelling. According to JLL Research, buildings targeted for redevelopment under the CBDI Scheme are significantly underperforming assets. These older buildings, with an average age of 42 years and smaller floor plates of under 10,000 sq ft, command rents of just $7.29 psf, which is 26% below the CBD’s average rent of $9.85 psf.

Hence, it is not a matter of “if” but “when” these buildings will be redeveloped. The CBDI Scheme simply provides the catalyst to activate this latent potential. However, not all landlords will choose this path, and some may opt for significant Additions & Alterations (A&A) to modernize their assets.

What makes full redevelopment a more convincing option is the scheme’s bonus plot ratio, which provides a compelling additional financial incentive. This creates a “double squeeze” effect on the market’s office supply.

The first consequence is the temporary removal of approximately 1.7 million sq ft of stock, based on known projects leveraging the CBDI for redevelopment to date. This is followed by a permanent reduction in pure office space as redeveloped assets are expected to deliver roughly 20% less office area to accommodate their new mixed-use focus.

This predictable tightening of the market accelerates the “flight to quality” into a structurally smaller pool of higher-grade space. For occupiers in older buildings, this creates a trilemma – they must choose between accepting higher rents, moving to another aging asset and postponing the inevitable, or relocating out of the CBD.

The affordability of these older buildings, at around $7.29 psf, comes with a hidden risk. For many, a forced move, while disruptive, becomes 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 process for every occupier. Instead of just considering the cost per square foot, they must now weigh redevelopment risk, business continuity, and brand positioning. Navigating this new reality requires a fresh perspective, which can be gained by examining the global stage.

Global Lessons in Navigating Transformation

Although each city’s regulatory context differs, the patterns of market transformation following major urban renewal are consistent. By studying how similar programs have reshaped other global hubs, occupiers in Singapore can anticipate what lies ahead.

For instance, the systematic renewal of Paris’s La Défense district shows that a rising tide lifts all ships and raises expectations for everyone. Before its renewal, La Défense was a first-generation business district facing obsolescence. The plan’s focus was on sustainability, aiming to become the world’s first “post-carbon” business district, which was its original aim. This meant that new buildings had to showcase ESG excellence, forcing existing tenants across the district to evaluate their own environmental credentials to remain competitive.

This revitalization of La Défense recalibrated the baseline, especially on non-negotiables like sustainability. It compelled occupiers to question whether their current workspace is an asset that attracts talent and aligns with corporate values or suggests their company is lagging behind.

Similarly, the rezoning of New York’s East Midtown enabled developers to purchase unused “air rights” from landmarks to build taller towers, such as One Vanderbilt. In exchange for this added density and improved commercial viability, they were required to fund major public infrastructure improvements, such as the subway system.

This created two distinct tiers of office accommodation – forcing companies to implicitly choose which tier aligned with their identity. The lesson learned is that the gap between old and new becomes a chasm, separating the market into distinct classes of prestige and functionality.

Finally, Tokyo’s approach in districts like Marunouchi highlights that urban renewal is not a one-time project but a continuous process. Its legislative framework creates “Special Urgent Urban Renaissance Areas,” which is rooted in a philosophy of constant improvement and allows for perpetual evolution. This creates an environment where tenants are not just leasing space but participating in an ecosystem that is constantly upgrading.

Expectations of excellence are continuous, challenging businesses to assess if their strategy is agile enough to adapt to a perpetually evolving urban landscape or is designed for a CBD that no longer exists.

Four Critical Board-Level Conversations

These global patterns confirm that an occupier’s response cannot be a simple real estate decision. It demands a series of fundamental conversations at the board level.

The first conversation should be about timing. Occupiers with leases expiring in 18-24 months must plan now to secure the best alternatives. Those with longer leases must scrutinize their redevelopment clauses and notice periods. Waiting for a landlord’s notice erodes leverage and options as the market tightens, shifting the advantage away from the tenant.

The second conversation should be about vision and brand. Does the physical environment reflect a forward-looking vision or anchor it to the past? An office is a powerful, tangible statement of a company’s ambition. In a revitalized CBD, occupying an aging asset can send a conflicting message to clients, partners, and potential investors before a word is spoken. It poses the question – what story does our front door tell?

The third conversation should be about talent and culture. In a competitive, hybrid work-oriented talent market, is the workspace a strategic tool for attracting and retaining the best people? To justify the commute, the office must now be a destination – a place that fosters collaboration, creativity, and connection. A modern, amenity-rich environment signals that a company invests in its people’s well-being while a dated space suggests otherwise.

The final conversation should be about risk and resilience. Is the real estate strategy resilient enough to navigate a market that is guaranteed to keep evolving? Relying on a short-term lease in a building marked for future redevelopment is a high-risk position that exposes a business to significant disruption and unforeseen costs. This conversation goes beyond lease terms; it is about ensuring business continuity and building a resilient operational footprint for the long term.

In Conclusion

The winners in this new landscape will be those who view real estate not as a fixed cost, but as a dynamic asset that must evolve with their business. Understanding the global playbook provides the foresight to do just that. It confirms one thing clearly – in a city designed for perpetual evolution, the greatest risk isn’t choosing the wrong building, but standing still.

Tahlil Khan is the executive director of leasing advisory at JLL Singapore

James Short is the senior director of leasing advisory at JLL Singapore.