DC rates up 1.7% for commercial, down 0.3% for non-landed residential use

SINGAPORE (EDGEPROP) - On Aug 30, the Ministry of National Development announced changes in development charge (DC) rates. For the period of Sept 1, 2019, to Feb 29, 2020, DC rates for commercial use (Use Group A) will increase by 1.7% on average, while those for non-landed residential use (Use Group B2) will decrease by 0.3% on average. The DC rates for the remaining use groups – landed residential, industrial, and hotel – remain unchanged.
DC rates are payable when planning permission is granted to carry out development projects that increase the value of the land, for example, re-zoning to a higher value use and/or increasing the plot ratio. These rates are revised on a half-yearly basis.
The revised rates take into account the chief valuer’s assessment of land values and recent land sales. They are classified according to use groups across 118 geographical sectors in Singapore.
Property consultants observed that the new DC rates are “within expectations” amid the current macroeconomic environment.
“Benefitting from business relocations and investment diversion amid heightened uncertainties and the global slowdown, Singapore appears to be more appealing as an investment safe haven,” says Christine Li, head of research, Singapore and Southeast Asia, Cushman & Wakefield (C&W).
“As such, for the period of September 2019 to February 2020, DC rates for commercial use increased, while those for non-landed residential use decreased,” she explains.
SOURCE: COLLIERS INTERNATIONAL, URA

Commercial

The increases in DC rates for commercial use saw adjustments of between 2.6% and 6.9%, averaging at 1.7% across 59 out of the total 118 geographical sectors. The highest increase of 6.9% was for suburban areas: Sector 100 (Tampines Road/Hougang/Punggol/Sengkang), Sector 105 (Ang Mo Kio/Yio Chu Kang/Seletar) and Sector 112 (West Coast Highway/Jurong East).
Ong Teck Hui, JLL’s senior director, research and consultancy, Singapore, attributes the increase in DC rates for commercial use in suburban areas to the investment interest seen in the preceding six months.
In March, SC Capital Partners purchased Rivervale Mall in Sengkang for $230 million or $2,833 psf on net lettable area (NLA).
In May, Frasers Centrepoint Trust acquired a one-third stake in Waterway Point in Punggol...