Reinventing Cbd What Singapore Can Learn Paris New York And Tokyo

Singapore’s Central Business District (CBD) Incentive (CBDI) Scheme, which was first introduced in 2019 and recently extended to 2030 as CBDI 2.0, is not just a policy for landlords. For occupiers, it is an opportunity to redefine their future in the city’s core district.

The scheme’s goal is to transform the CBD into a round-the-clock mixed-use area that balances commercial activity with residential and lifestyle amenities. It encourages owners to replace old office buildings with integrated developments that promote live-work communities and better connectivity.

According to JLL Research, the scheme covers 16% of the CBD’s total office inventory, with over 25 buildings comprising approximately 6.4 million sq ft meeting the criteria.

For business leaders, understanding the ripple effects of this transformation is more important than focusing on the policy details. The experiences of other global cities that have undergone similar changes can provide valuable insights, turning what may seem like a disruption into a strategic advantage.

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The ripple effect: How a landlord’s incentive becomes an occupier’s reality

The logic behind this transformation is clear. According to JLL Research, buildings targeted for redevelopment under the CBDI Scheme are significantly underperforming assets. These older buildings have an average age of 42 years and smaller floor plates of under 10,000 sq ft, resulting in rents that are 26% lower than the CBD average of $9.85 psf.

As a result, it is only a matter of time before these buildings are redeveloped. The CBDI Scheme simply provides the catalyst to activate this potential. While some owners may choose to significantly renovate their assets, the scheme’s bonus plot ratio provides a compelling financial incentive for full redevelopment.

‘Double squeeze’

The immediate consequence of this is a ‘double squeeze’ on office supply in the market. Firstly, approximately 1.7 million sq ft of stock will be temporarily removed due to known projects leveraging the CBDI for redevelopment. Secondly, as redeveloped assets are expected to deliver around 20% less office area to accommodate their new mixed-use focus, there will be a permanent reduction in pure office space.

This tightening of office supply 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 ageing asset and postpone the inevitable, or relocate out of the CBD. However, the affordability of these older buildings, with rents at around the $7.29 psf baseline, 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.

Ultimately, this combination of constrained supply, escalating costs, and strategic trade-offs alters the decision-making for every occupier. The simple question of ‘cost per square foot’ is being replaced by a more complex equation that must now weigh redevelopment risk, business continuity, and brand positioning. Navigating this new reality requires a fresh perspective, one that can be gained by examining the global stage.

Global lessons in navigating transformation

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

The examples of Paris’s La Défense district, New York’s East Midtown, and Tokyo’s Marunouchi offer valuable insights into the potential outcomes of Singapore’s CBDI Scheme.

Paris’s La Défense district was a first-generation business district facing obsolescence before its systematic renewal. The plan focused on sustainability, aiming to become the world’s first “post-carbon” business district. This meant that new buildings had to meet stringent ESG standards, forcing existing tenants across the district to evaluate their own environmental credentials to remain competitive.

In New York’s East Midtown, the rezoning allowed developers to purchase unused ‘air rights’ from landmarks to build taller towers, like One Vanderbilt. In exchange for this added density, developers were required to fund major public infrastructure improvements. This directly linked a premium corporate address with a tangible benefit to employees and the public, creating a powerful branding narrative. It also created two distinct tiers of office accommodation, forcing companies to implicitly choose which tier aligned with their identity.

Tokyo’s approach in districts such as 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. This allows for perpetual evolution, creating an environment where tenants are not just leasing space but participating in an ecosystem that is constantly upgrading.

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.

Firstly, timing is crucial. Occupiers with leases expiring in the next 18-24 months must plan ahead to secure the best alternatives. Those with longer leases must scrutinize their redevelopment clauses and notice periods to avoid losing leverage and options as the market tightens.

Secondly, there is a need to consider vision and branding. Does the physical environment reflect a forward-looking vision or anchor it to the past? The office is a tangible statement of a company’s ambition, and in a revitalised CBD, occupying an ageing asset can send conflicting messages to clients, partners, and potential investors. It poses the question: What story does our front door tell?

The third conversation is 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. A dated space suggests the opposite.

Finally, the conversation about risk and resilience is crucial. 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 is not just about lease terms; it is about ensuring business continuity and building a resilient operational footprint for the long term.

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, it’s standing still.

Tahlil Khan is the executive director of leasing advisory at JLL Singapore, while James Short is the senior director of leasing advisory at JLL Singapore.