FOR some time now, Singapore has been seeking to make its Central Business District (CBD) more vibrant after office hours and on weekends, by encouraging more homes to be built to inject a bigger live-in population into the district.

In the past two decades, some 15 projects yielding about 6,100 private homes were completed in the district, shows a compilation by PropNex Research. These include the likes of The Sail @ Marina Bay, Icon, Marina One Residences, V on Shenton and The Clift. Another four projects, with nearly 1,500 homes, are under construction: Skywaters Residences, W Residences Singapore – Marina View, One Bernam and Newport Residences (see tables).

However, merely introducing new housing stock will not necessarily liven up the CBD. There is a need for supporting amenities – including schools, playgrounds, sports facilities, wet markets, festival markets and community-bonding activities – to attract more families to live there, say property industry observers.

Moreover, prevailing property cooling measures, especially the punitive 60 per cent Additional Buyer’s Stamp Duty (ABSD) rate on foreigners buying a residential property in Singapore, have affected demand for private homes in prime areas, including the CBD.

On the other hand, some observers feel that a more pressing concern in the CBD is a looming shortage of prime offices – with no new significant supply of Core CBD Grade A office space slated for completion over the next three years. The last time the government sold a substantial site with predominant office use in the CBD was in 2016. Instead it has turned its attention to promote decentralised office clusters in places such as Woodlands, Punggol and Jurong Lake District.

“To make the CBD attractive as a place to live requires out-of-the-box and daring prescriptive policies.” —LEONARD TAY OF KNIGHT FRANK

What is the optimal use of land in the CBD? According to one school of thought, it does not have to be an “either-or” choice between injecting more homes and more offices.

“In a land-resource-limited Singapore, we need a good balance of uses in the CBD. Having a desolate CBD after 7 pm and on weekends just doesn’t seem to be a productive use of our resources,” says Chua Yang Liang, head of research and consultancy for South-east Asia at property consulting group JLL.

He points out that the Urban Redevelopment Authority’s vision to bring more life into the CBD through injecting more night population is similar to what has been done in more vibrant global cities such as London, Manhattan and Sydney, where there are some communities living within the downtown area.

Desmond Sim, chief executive officer of real estate advisory ETC, concurs on the need to improve land productivity. “The goal is to introduce a more diverse land-use mix into the CBD to ensure 24/7 land usage.”

He notes that it is not surprising that Singapore will continue to allocate residential supply in the CBD, in line with the “work, live and play” concept. This will not only enhance urban liveability, but also generate foot traffic and sustained demand for the retail as well as food and beverage (F&B) components, he adds.

“It is an opportune time to balance the supply situation with some infill office sites in the CBD.” —CHUA YANG LIANG OF JLL

Daring policies needed

Knight Frank Singapore research head Leonard Tay argues that to make the CBD attractive as a place to live and to ensure that the buzz of human activity is sustainable, it requires “determined resolve by the government to make out-of-the-box and daring prescriptive policies specifically targeted at the CBD”.

His first suggestion is to lower the ABSD rate for foreigners from 60 per cent to 30 per cent, or even scrapping the ABSD altogether – specifically for their purchases in the CBD. “This will ensure the return of foreign buyers, ushering in a cosmopolitan mix of resident owner-occupiers.”

Han Huan Mei, research director at List Sotheby’s International Realty, says that foreign buyers’ share of new private apartment/condo unit sales in the Core Central Region (CCR), which includes the CBD, has fallen from 33.2 per cent in 2011 to 10.8 per cent in 2024.

Annual transactions of such properties (across all buyer profiles) have shrunk from 3,669 in 2010 (when there was a string of project launches in districts 9 and 10 after the en bloc frenzy in 2006 to 2007) to 378 units in 2024.

Han says that historically, new condo/private apartment projects in the CCR tended to attract a higher proportion of foreign buyers and well-heeled Singaporean and permanent resident (PR) investors – compared with elsewhere on the island.

However, the buying fervour among these segments has been doused by the roll-out of the ABSD in December 2011, followed by four further rounds of revisions in 2013, 2018, 2021 and 2023.

Currently, the ABSD rate stands at 60 per cent for foreigners purchasing any residential property in Singapore. For Singapore citizens and PRs buying their second residential property, the ABSD rates are 20 per cent and 30 per cent, respectively. (For the third and subsequent property purchases, ABSD is 30 per cent for Singapore citizens and 35 per cent for PRs.)

“In order to bring back some demand, it may be worthwhile for the authorities to consider lowering the ABSD for these groups of buyers in the CCR,” notes Han.

“The challenge is in creating a desire for people to want to reside in the CBD and to view the district as a great place to live.” —WONG SIEW YING OF PROPNEX

Tay of Knight Frank offers another suggestion to bring more buzz to the CBD. “To balance the foreigner crowd, the government would also need to build some HDB (Housing and Development Board) blocks in the CBD, so that there is also a Singaporean population residing there at affordable public housing prices.”

Currently, there are no HDB flats within the CBD, though there are some very near the district, such as in Tanjong Pagar Plaza, Pinnacle @ Duxton in Cantonment Road and in the Kreta Ayer area.

The government has been trying to encourage a greater live-in population in the CBD by, among other things, selling land for development into private homes as well as through a scheme that spurs owners of ageing office buildings in some parts of the CBD to rejuvenate their properties into mixed-use projects including residences.

Creating a desire to live in the CBD

PropNex’s head of research and content Wong Siew Ying highlights the “challenge in creating a desire for people to want to reside in the CBD and to view the district as a great place to live – and a not-too-expensive one at that”.

She notes that the cost of living is likely to be higher in the CBD compared with the HDB heartlands, where there are wet markets, coffee shops, various supermarkets and shops in neighbourhood centres. The lack of schools in the CBD could be an issue for families with children.

“The attractiveness of living in the CBD generally hinges on affordability, whether everyday needs are amply catered for, and having a strong sense of community,” says Wong.

In a similar vein, Tricia Song, the head of research for Singapore and South-east Asia at CBRE, highlights that more supermarkets, convenience stores and eateries that operate through the weekends and public holidays are needed to make it more feasible for folks to live in the CBD. “But this is a chicken-and-egg thing. We need more residents in the district to liven it up round the clock and during weekends, and support retail and services that are set up in the CBD,” she adds.

By some accounts, Singapore’s CBD is seen as a pretty soulless place with nothing much to do, except work. Those who live in the apartments in the district are mostly singles, or couples with no children, be they tenants or owner-occupiers, Singaporeans or other nationalities. Some of the occupants may be working in nearby offices.

Like how Canary Wharf in London has evolved after starting off as a financial centre, Singapore’s CBD may need a full-scale mall, street retail, entertainment and activities for everyone, including tourists – adapted to Singapore’s tropical climate, of course.

Observers also note that unit sizes of private homes in the city area tend to be relatively compact. To cater to mid-sized families, developers will need to build larger units.

That said, Singapore’s CBD has many plus points as a place to set up home. Dining options range from upscale restaurants and chic cafes to hawker centres (such as Maxwell Food Centre, Amoy Street Food Centre and Market Street Hawker Centre).

Says Wong of PropNex: “The CBD is also near the Civic District and arts and cultural precinct. The Formula 1 night race takes place not far from the CBD.

“Homes in the district may command spectacular views of the sea or the city skyline, and there may be opportunities to watch the fireworks display from the comfort of home.”

Unmatched connectivity

In addition, the CBD offers unmatched public transport connectivity. “The CBD is perhaps one of the most well-connected areas in Singapore, being served by eight existing MRT stations, with another due to open in 2026,” Wong observes.

This factor also makes the CBD an ideal location for offices. As Alan Cheong, Savills Singapore’s executive director of research and consultancy, notes: “Singapore’s road and public transportation network tends to radiate from the CBD. This means that it is easily accessible from all corners of the island. One should capitalise on this.”

He argues that the majority of space in the CBD should be for office use, with some supporting retail and F&B space. “There should be some homes, but limited in number.”

Singapore CBD Grade A office rents are rising due to a relative lack of supply, not because occupiers’ businesses are booming. This is not healthy in the long run for Singapore’s competitiveness, Cheong adds.

“There is a greater need for more office supply, rather than homes, in the prime CBD areas. This is what the market wants,” he postulates.

“A multinational company exploring Singapore would have heard about Marina Bay and Raffles Place and these areas make a strong impression to the global business community. To advise an alternative location would take a lot of effort and ultimately may make the company set up in another country.”

Repeat of 2007/2008 office-rent hikes?

Dr Chua of JLL says that should the lack of prime Grade A office supply in the CBD, combined with the removal of older office stock for upgrading or redevelopment, meet an uptick in office leasing demand, the market could potentially see a repeat of 2007/2008 when CBD Grade A rents escalated.

“There are many parameters at play here – including politicised economic policies of the Trump administration, geopolitics, nationalism and stubborn interest rates – and it is too early to call where they are heading.

“I think it is an opportune time to balance the long-term supply situation with the release of some infill office sites in the CBD via the government land sales (GLS) programme,” Dr Chua suggests.

Song of CBRE sees having more homes and simultaneously more good-quality offices as the optimal scenario for the Singapore CBD.

She adds that between the two, the need is greater for office supply in the prime CBD area to offer choices for businesses to leverage the world-class infrastructure, amenities and ecosystem already in place in the area.

“An ageing CBD with no new supply may put off potential new-to-market entrees, and limit growth opportunities for existing occupiers with plans to expand or upgrade,” she adds.

The majority of occupiers may still prefer to be in the CBD, for talent attraction and retention, says Song, citing among other factors, the prestigious address, accessibility and equity in terms of the commute from different parts of Singapore.

“However, there are also businesses that do not need to be in the city centre; they may be cost-sensitive but want more space, or they prioritise proximity to clients or suppliers who are already in decentralised locations. So there is also a need for decentralised offices,” Song adds.

Sim of ETC acknowledges the tight supply of CBD Grade A offices, but also makes the case for the office decentralisation strategy. This includes easing the strain on the transportation infrastructure and reducing peak-hour congestion in the city centre by bringing jobs closer to homes in the suburbs.

He offers a suggestion to strike a better balance of office supply between the CBD and decentralised markets. “We could have greater flexibility for GLS sites. While maintaining a stipulated minimum component for each intended land use, a larger ‘white’ component can be introduced to allow developers to tailor land use according to market conditions, demand trends, as well as the respective developers’ expertise and intuition.”

The whole issue thus might require some novel thinking. After all, fortune favours the bold.