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[SINGAPORE] The government has increased development charge (DC) rates by a staggering 24 per cent on average for commercial use and 26 per cent for hotel use - on the back of strong land bids at state tenders in the past six months.
The average rate hikes for these two use groups were much higher than predicted by consultants.
In the residential segment, the average DC rate was raised 4 per cent for landed use but rates were left unchanged for non-landed use. The average DC rate for industrial use edged up 0.6 per cent.
DC rates, revised on March 1 and Sept 1 each year, are stated according to use groups, across 118 geographical sectors. Development charge is paid to the state in exchange for the right to enhance the use of certain sites or to build bigger projects on them. DC rates take into account current market values.
For commercial use, the biggest DC rate hike of 39 per cent was in geographical sectors 114 and 115 (which include Yishun, Sembawang, Woodlands, Choa Chu Kang and Jurong West).
The increase was due to the sale of a mixed commercial and residential site at the corner of Yishun Ring Road and Yishun Avenue 9 at a state tender which closed in January for $794 per square foot of potential gross floor area (GFA). This reflects substantial premiums of 46 per cent and 147 per cent to implied land values based on commercial and non-landed residential DC rates respectively as at Sept 1, 2012, notes Chia Siew Chuin, director of research and advisory at Colliers International.
The average rate hikes for these two use groups were much higher than predicted by consultants.
In the residential segment, the average DC rate was raised 4 per cent for landed use but rates were left unchanged for non-landed use. The average DC rate for industrial use edged up 0.6 per cent.
DC rates, revised on March 1 and Sept 1 each year, are stated according to use groups, across 118 geographical sectors. Development charge is paid to the state in exchange for the right to enhance the use of certain sites or to build bigger projects on them. DC rates take into account current market values.
For commercial use, the biggest DC rate hike of 39 per cent was in geographical sectors 114 and 115 (which include Yishun, Sembawang, Woodlands, Choa Chu Kang and Jurong West).
The increase was due to the sale of a mixed commercial and residential site at the corner of Yishun Ring Road and Yishun Avenue 9 at a state tender which closed in January for $794 per square foot of potential gross floor area (GFA). This reflects substantial premiums of 46 per cent and 147 per cent to implied land values based on commercial and non-landed residential DC rates respectively as at Sept 1, 2012, notes Chia Siew Chuin, director of research and advisory at Colliers International.
