23-05-2025
Higher height limits a gamechanger for redevelopment potential in areas around Singapore airports: analysts
[SINGAPORE] Relaxed height restrictions near airports and airbases could result in huge increases in built up floor area allowances, a move lauded by property market observers for its potential to unlock redevelopment opportunities.
The government is reviewing Singapore's height limits for buildings near airports, Transport Minister Chee Hong Tat disclosed on May 22.
Residential buildings could be built up to 15 storeys taller, and commercial and industrial buildings could be built up to nine storeys taller.
Depending on the existing height limit, adding up to 15 storeys could mean a 100 to 200 per cent increase in gross floor area (GFA) for residential developments, said Tricia Song, CBRE's head of research for Singapore and South-east Asia.
'In land-scarce and densely populated Singapore, one of the fastest and most efficient ways to increase liveable space is to go vertical – allowing more gross area to be built on the same land site,' she said.
Alan Cheong, executive director at Savills Singapore, called the review a welcome policy change that may allow nearby properties to raise their plot ratios. Plot ratio determines the maximum allowable GFA on a plot of land.
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The review was conducted by the International Civil Aviation Organization (ICAO) and the Civil Aviation Authority of Singapore (CAAS), and changes take effect internationally from August.
Singapore has two airports in Changi and Seletar; and military airbases in Paya Lebar, Sembawang, Changi and Tengah. Areas near Changi Airport include Pasir Ris, Tampines, Simei, Bedok, Eunos and East Coast Park. Seletar Airport is near Seletar, Yishun, Ang Mo Kio and Yio Chu Kang.
Cheong said the review could lead to a significant increase in GFA from collective sales or redevelopment of existing residential and commercial properties.
Older commercial buildings near Paya Lebar air base, previously limited by height restrictions, could see redevelopment potential. Additional GFA may be unlocked if industrial sites are rezoned for higher-value uses.
Details of the proposed changes have yet to be revealed by the authorities.
Building height limits near airports and airbases depend on their distance from runways and air navigation equipment, said Lim Boon Chai of To70 Aviation Consulting.
Generally, buildings up to 4 km from an airport are allowed to reach 45 m above runway elevation, though stricter limits apply along flight paths or near navigational facilities. Outside these zones, height caps vary – up to 305 m in the CBD and 150 m in some residential areas, he said.
A 2019 report by the Centre for Liveable Cities, an arm of the Ministry of National Development, noted that in Tampines, building heights are capped at 12 to 14 storeys.
Aviation height restrictions, among other factors, can influence the type of properties built on a site and the value they fetch.
Market boost?
Analysts reckon that changes to height limits could also drive up the value of existing homes and buildings.
CBRE's Song said that for older projects, the increased plot ratios will benefit potential en bloc sellers as their land is now worth more.
'If you can build more gross area on the same piece of land, there is more premium in selling for redevelopment than in selling in the secondary market,' she added.
Developers in turn may now be prepared to pay more. 'The gap between developers' prices and sellers' prices will narrow, and more en bloc or collective sales could happen,' she said. Developers could also now have more choices for their landbanking, she added.
The collective sales market was subdued in 2024, with only four successful deals out of the 16 properties put on the market – half of 2023's 32 properties.
Most recently in April, the tender for Pasir Ris condo Elias Green closed with no bids, after being put on the market with a guide price of S$928 million.
The site, currently built up to 16 storeys and standing on a parcel with a low plot ratio of 1.4, was priced at a land rate of S$1,355 per square foot per plot ratio. This factors in a 10 per cent bonus gross floor area and an estimated land betterment charge of S$150.8 million for intensification and upgrading to a fresh 99-year lease.
'Owners of Elias Green have submitted an outline application for an increase in plot ratio from 1.4 to 1.8. With this relaxation in building height, the URA may view the outline application in a more favourable light,' said Tay Liam Hiap, the agency's managing director of capital markets and investment sales.
Savills' Cheong expects prices of new residential projects or resale flats near airports and air bases to rise.
'Any new launches or resales in the area will price in the future growth potential and thus prices would implicitly be moving up from now on,' he said.
'Developers would bid according to what they believe they can sell and if the selling prices go up, then they will be more willing to bid higher for either government land sales or collective sales sites.'
CBRE's Song noted that for residential projects, taller buildings generally command higher prices per square foot, as buyers value unblocked views and reduced noise.
While relaxed height restrictions could increase supply across residential, commercial and industrial sectors, lifting GFA allowances requires further feasibility studies, said Knight Frank Singapore's head of consultancy Alice Tan.
Private sites with 'low development baselines' are less likely to support higher plot ratios or upgraded use groups, given current high land betterment charge (LBC) rates, she noted. Developers pay an LBC for the right to enhance the use of some sites or to build bigger projects on them.
Still, analysts cautioned that more studies are needed before redevelopment can take off.
CBRE's Song said: 'Increased plot ratios will mean higher density, and the existing road network and transport infrastructure may not be able to support. Detailed transport impact assessment and planning will have to be undertaken.'
Chua Yang Liang, JLL's head of research and consultancy for South-east Asia, said: 'Any increase in development capacity would need to be evaluated alongside corresponding adjustments to LBCs, construction costs, and other financial considerations that developers must balance.'
The CAAS said agencies will assess the implications of the revisions, taking into account other infrastructure and planning considerations.
Savills' Cheong also pointed out that the increase in height limits may not be beneficial for commercial properties upon redevelopment.
'Already, the demand for offices in less prime locations is not strong, and the retail/food and beverage sectors have been struggling.'
