Will DC complicate the green push?

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Published April 30, 2009

Rooftop landscaping gets $8m boost

NParks launches 3-year co-funding scheme; URA starts landscaping for urban spaces plan

By EMILYN YAP


(SINGAPORE) Hot on the heels of a sustainable development blueprint released on Monday, the National Parks Board (NParks) yesterday announced a three-year $8 million scheme to co-fund rooftop landscaping in the city.

The Urban Redevelopment Authority (URA) also launched its landscaping for urban spaces and high-rises (Lush) programme to help meet the blueprint's goal of creating another 50 hectares of 'sky-rise' greenery by 2030.

'Despite Singapore being land scarce, greenery can be pervasive in our urban spaces,' said URA chief executive Cheong Koon Hean. From September this year, NParks will give cash incentives to owners who install green roofs on existing buildings in the downtown and Orchard planning areas. The scheme will first target low- to mid-rise developments that are highly visible, and those surrounded by little street-level greenery.

NParks hopes to create nine hectares of green roofs over the next three years. The incentives will cover up to half of installation costs, capped at $75 per sq m. According to the agency, the typical cost of installing a green roof ranges from $150-$180 per sq m.

Gardens on the roof cost more than those on the ground for every square metre, said Singapore Institute of Landscape Architects' president Henry Steed. 'But once you have built it, the asset is there and the land usable, whereas a plain roof is not.'

In conjunction with NParks' scheme, URA will offer owners who install green roofs bonus gross floor area (GFA) above the master plan permissible intensity. The additional space - limited to half of the roof area or 200 sq m, whichever is lower - can be used for outdoor refreshment areas.

Developers will have to pay a development charge (DC) or differential premium, but URA believes the bonus GFA offer is sufficiently attractive.

The current DC calculation formula creams off 70 per cent of the enhancement in land value, but 'there's still a 30 per cent gain for developers,' said URA's urban design deputy director Cheng Hsing Yao.

The GFA incentive scheme is part of URA's Lush programme, which includes other existing and revised measures to enhance the urban landscape.

For instance, developers applying to exclude sky terraces from GFA computations now have to submit detailed plans on landscaping and communal facilities at the terraces.

Developers housing car parks within raised decks must also put up earth berms for plants on at least 60 per cent of each side of the deck wall, and should surround the area with see-through fences rather than solid walls.

In the strategic areas of the Downtown Core, including Marina Bay, Kallang Riverside and Jurong Gateway, new developments also have to put in place 'sky-rise' greenery or ground-level landscaping equivalent to the site area in size.

For very small plots where buildings have to be tall to maximise the plot ratio, 'replacement is typically not too difficult,' said Singapore Institute of Architects immediate past-president Tai Lee Siang.

Both Mr Steed and Mr Tai believe more can be done to promote urban greenery.

Mr Steed, for instance, envisions it will ultimately be possible for all roofs to have green features ranging from gardens, water catchment areas and even mini-farms.

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Published April 30, 2009

COMMENTARY

Will DC complicate the green push?

Reverting to the 50% formula might be timely

By KALPANA RASHIWALA


NEW incentives rolled out this week to support the greening of Singapore's buildings have once again put the spotlight on the formula for calculating development charges (DC).

For instance, the Building and Construction Authority and Urban Redevelopment Authority will offer bonus Gross Floor Area (GFA) of up to one per cent of total GFA capped at 2,500 square metres to developers that construct new buildings which attain Green Mark Gold Plus rating.

For new projects that achieve the top Platinum rating, a higher bonus GFA of up to 2 per cent capped at 5,000 sq m will be granted as incentive.

The bonus GFA is not free; DC is payable.

URA has also announced a new incentive to promote skyrise greenery. It will allow additional GFA for existing buildings within key activity corridors in the Orchard and Downtown Core planning areas.

The additional space can be used for outdoor refreshment areas on the rooftop level if owners provide rooftop landscaping for their developments. Again, DC is payable for this bonus GFA.

Unfortunately the way DC has been calculated since a formula change in July 2007 could diminish the attactiveness of these incentives. The current DC formula creams off 70 per cent of the appreciation in land value that arises from changing the use of a site or putting more GFA on it.

The previous DC formula, which was effective between 1985 and July 2007, creamed off 50 per cent of the enhancement in land value. A point to note is that prior to 1985, DC rates had also been based on the 70 per cent formula, until they were adjusted to 50 per cent during the 1985 recession.

With Singapore in the throes of a slump currently, many property industry players have called on the government to reinstate the 50 per cent formula.

After all, in 1985, the authorities deemed it fit to cut the DC rate to 50 per cent because of the recession and the same should apply now as Singapore is going through its worst recession.

Another reason to argue for a restoration of the 50 per cent DC formula is that sharing the appreciation in land value equally between government and private land owner - instead of developers being forced to surrender 70 per cent of the enhancement to the state - would be a fairer policy. Developers have to be given sufficient incentive to bear the risk of development.

Now, there's an extra reason why it would be timely for the government to reinstate the previous DC formula: to spur developers to attain higher Green Mark ratings for their buildings and promote skyrise greenery on the island. According to BCA data, it costs 2-8 per cent more to develop a building to attain the top Platinum standard and the payback period for this is between two and eight years.

For developments built to the second-highest Green Mark standard of Gold Plus, the green cost premium is 1-3 per cent and the payback period is 2-6 years.

Having to pay a lower DC rate on the bonus GFA would lessen the cost burden to developers keen on building new projects that attain the top two Green Mark ratings.

Some observers have suggested that even if the government refuses to restore the old 50 per cent DC formula, it should at least consider using this formula for computing DC for the bonus GFA under the new schemes announced this week.

But having different DC rates for different purposes may complicate things. Retaining the current uniform DC rate would be desirable but a reversion to the old 50 per cent formula would be a timely move for the government to give developers more bang for their buck to invest in green buildings.

It will also allow the government to get maximum effect from its newly minted schemes to promote Sustainable Development in Singapore.

http://www.straitstimes.com/Singapor...ry_370399.html

April 30, 2009 Thursday

More 'sky gardens' set to blossom

New URA plan makes landscaping a must for new projects downtown

By April Chong & Jessica Cheam

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With the Lush programme, there will be more landscaping, such as sky terraces at the upcoming Marina Bay Station Square (left) and planter boxes like those at the Singapore Management University. -- PHOTOS: URA

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With the Lush programme, there will be more landscaping, such as sky terraces at the upcoming Marina Bay Station Square and planter boxes like those at the Singapore Management University (right). -- PHOTOS: URA

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Newton Suites boasts extensive sky terraces and vertical greenery that are in line with the new URA initiative. -- PHOTO: PATRICK BINGHAM-HALL

EXPECT to see more 'gardens in the sky' in Singapore, especially in areas like Orchard Road, Raffles Place and along the Singapore River.

A new plan launched yesterday by the Urban Redevelopment Authority (URA) makes it a must for new developments coming up in several areas from December to have landscaping.

This can take the form of rooftop gardens, planter boxes and sky terraces on the upper levels. Developers will also be encouraged to landscape their grounds.

The areas affected by this new ruling are the Downtown Core - which encompasses Raffles Place, Shenton Way, and Marina Centre - along the Kallang River, and Jurong Gateway, the upcoming commercial hub in the west.

Existing buildings will not be left out.

Those in Orchard Road and the business district will be allowed to open outdoor refreshment areas on their rooftops. To do this, they will be given additional gross floor area of half the roof area or up to 200 sq m.

This complements a programme launched on Monday by the Building Construction Authority (BCA) and URA. Under it, private buildings which are eco-friendly enough to achieve high standards under BCA's Green Mark scheme get additional gross floor area.

The new URA initiative, launched yesterday, is called Landscaping for Urban Spaces and High-Rises (Lush), and is part of a national sustainability blueprint launched by an inter-ministerial committee on Monday.

The blueprint sets national targets for pollution standards, energy usage and green areas over the next 20 years, and aims to create a more environmentally friendly and energy-efficient nation.

In addition to the Lush programme, the National Parks Board also announced yesterday an $8 million fund that developers can tap to create rooftop gardens on existing buildings.

To be launched in September, the fund will offset up to $75 per sq metre for landscaping costs - about half the $150 to $180 per sq m usually charged by gardening companies.

Landlords in the Orchard Road and downtown areas can apply to the fund.

In announcing the plans yesterday, the URA said that encouraging private developers to include greenery in their buildings is becoming increasingly important as Singapore becomes more built up.

Developers that The Straits Times spoke to yesterday welcomed the moves, but had suggestions to make the scheme more attractive as URA had said that the the usual development charges (DC) would apply.

The DC rate is pegged at 70 per cent of a building's enhanced land value.

Managing director of City Developments Kwek Leng Joo felt that while developers can make use of the additional area, they would have to grapple with the additional costs.

'We would suggest that the DC rate be pegged at the previous rate of 50 per cent instead of the current 70 per cent, which most developers find too high.

'This could make the incentive more attractive and effective to help the policy take off quickly,' he said.

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April 30, 2009 Thursday

Editorial

Greening buildings in bad times a hard sell


EVEN as it topped a global list published this week of cities with the best infrastructure, and ranks reasonably in quality of life, Singapore has barely begun to make its buildings energy-efficient. It is one contradiction that can be fixed with policy measures and private sector cooperation. The second Building and Construction Authority (BCA) green building master plan, unveiled on Monday, could achieve that - if incentives and injunctions work. The first plan, begun in 2006, made only 1 per cent of buildings energy-efficient, despite what the BCA described as a 'sharp increase' in buildings meeting its Green Mark last year.

Aiming to render 80 per cent of buildings green by 2030, the new plan shifts the emphasis from new to existing buildings. It is a tactical refocusing that could have wider potential impact, since these buildings account for a third of national electricity consumption. The BCA will offer $100 million in government co-funding to retrofit such buildings as shopping malls, hotels, offices and hospitals so they can cut their energy costs by at least 20 per cent. It estimates energy savings at $120 million a year, which is not a bad rate of return on investment. The critical question is, are there enough building owners who are in a position to take advantage of the incentive? Many are expecting to collect less rent as business slows further.

Developers of new buildings face a similar constraint. Energy efficiency will likely not be their first priority even if they are bold enough to begin construction in a recession. Like owners of existing buildings, they will want the BCA to indicate long if not short term gains. The plan will award 1 or 2 per cent bonus gross floor area, capped at 2,500 sq m or 5,000 sq m, if buildings reduce energy consumption by 25 or 30 per cent. Developers will have to go to the drawing board, literally, to build green technology into the designs. Again, how many can BCA convince with the green carrot? Perhaps because of the economic climate, only in several 'strategic growth areas' are higher energy standards set (as land sales conditions).

National Development Minister Mah Bow Tan has pointed out that sustainable development efforts and tackling economic challenges 'are not mutually exclusive'. With deeper pockets, the Government can and will take the lead, by greening existing and new public buildings. As soon as the economy recovers, the private sector will be more willing and able to follow that lead. It will do well to help Singapore maintain the best infrastructure and achieve among the highest and most sustainable liveability standards.

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URA, NParks introduce schemes to promote more sky gardens in S'pore

By Timothy Ouyang, Channel NewsAsia | Posted: 29 April 2009 1841 hrs


SINGAPORE : Singapore developers will enjoy new incentives to include skyrise greenery in their projects.

The government wants to see more sky terraces and rooftop gardens, as part of a multi-billion dollar sustainable development blueprint for Singapore for the next 20 years.

The initiative is known as Landscaping for Urban Spaces and High-rises (LUSH).

Fun Siew Leng, group director of Urban Redevelopment Authority (URA), said: "A lot of people place premium on having greenery at their doorstep. And it doesn't mean that by going high-rise you don't have access to greenery.

"So, one of these ways is to encourage and require more greenery to be built in the development itself, either at the ground level or even at the upper levels."

Come December 1 this year, new projects and re-developments within the central business district, Kallang Riverside and Jurong Gateway areas will be required to have green landscape at least equivalent in size to the development site area.

These can include ground floor landscape areas, as well as roof gardens and sky terraces. As a guide, 40 per cent of these areas are to consist of permanent planting.

Developers will also be given additional gross floor area of up to 200 square metres of roof space or 50 per cent, whichever is lower, for greening their rooftops for use such as outdoor refreshment areas.

This will be allowed over and above the Master Plan maximum allowable gross floor area for the site.

And it is not just new buildings that will stand to benefit from the initiative. NParks is introducing a pilot scheme later this year to encourage existing building owners to green-up their roof tops.

NParks is spending S$8 million over the next three years in cash incentives to co-fund up to half the cost of installing green roofs.

A green roof is defined as a lightweight growing system, which requires a proper selection of plant material for easy maintenance. The cost of installing a square metre of green roof typically ranges from S$150 to S$180.

"There are also benefits in reduction of heat as well. The green roof reduces the heat load going into the building as well as the ambient temperature of the roof itself," said Simon Longman, director of National Parks Board.

So far, there are more than 100 developments in Singapore with approved sky terraces.

NParks will start giving out the cash incentives in September 2009.

NParks plans to transform some 9 hectares of existing rooftops into green roofs over the next three years.

The URA is targeting to add 50 hectares of skyrise greenery by 2030. - CNA /ls

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Published May 5, 2009

COMMENTARY

Current DC rates too high for Lush to be an incentive

By LEE HON KIUN


A NEW initiative called Landscaping for Urban Spaces and High-Rises (Lush) - launched last week by the Urban Redevelopment Authority - offers a gross floor area (GFA) incentive scheme for buildings in the Orchard and Downtown Core planning areas to promote roof-top greenery.

This additional GFA can be used only for Outdoor Refreshment Areas (ORAs) at roof-top level if owners provide roof-top landscaping. A Development Charge (DC) or land premium, where applicable, is payable for this additional GFA.

The DC system, now used in Singapore, is based on the principle of sharing of enhanced land value. Since July 18, 2007, DC rates have been pegged at 70 per cent of land value, up from 50 per cent previously.

The 30 per cent balance is free, which is supposed to give the owner an incentive to undertake development work.

Under the fixed-rate system, the DC rate is an average value within a geographical sector. Applying it to a multi-storey development on a specific site, it is also an average value for that development.

As building intensifies or plot ratio increases, the additional floor area inevitably goes to higher floors. DC rates, therefore, work in favour of office and residential developments, where higher floors command higher value, but vice-versa for shopping centre and industrial/warehouse developments.

By levying the DC rate on a roof-top retail floor area, the 30 per cent benefit to the owner for undertaking the development is diminished. For example, take a typical five-storey shopping centre development where the DC rate is $7,000 per sq m (psm) of GFA.

The implied average land value of $10,000 psm would be at third-storey level. As rental and capital values decrease progressively towards higher floors, the land value of the floor area on the fifth storey roof-top could well drop more than 30 per cent to below $7,000 psm. There is, therefore, no financial incentive for the building owner to participate in such an initiative.

That's just the DC component of cost. There will be other elements to consider, such as the cost of landscaping the roof-top and building the ORA, as well as the installation of additional mechanical and electrical equipment if necessary.

Most important is the accessibility of roof-top space. To install a new pair of escalators just to service a 200 sq m of ORA would not be cost-effective.

If the DC rates for roof-top ORA remain pegged at 70 per cent, how effective this initiative will be in promoting roof-top greenery will depend on the movement of the DC rates in the next few DC reviews.

The current DC rates for commercial use for the Orchard and Downtown Core planning areas, ranging from $4,550 psm in the Rochor Road area to $11,200 psm in the Scotts Road area, are near an all-time high.

The DC rates have to drop to make the Lush initiative attractive to building owners. And the drop has to be significant - and occur before the three-year validity period of the new scheme is over.

The writer is the owner of Landmark Property Advisers, a boutique property agency specialising in investment sales and property advisory services