The government has trimmed the development charge (DC) rates for industrial use, but the rates for all other use groups including residential, commercial, hotel/hospital and place of worship/civic and community uses remain unchanged for the period of 1 September 2015 to 29 February next year, revealed the Ministry of National Development (MND).
“With the dearth in land transactions, the Chief Valuer could have taken the cue from the occupier market to determine the DC rates for this round of revisions. With the market having just turned, the rates for office, retail and residential have remained unchanged as it is too quick to revise the rates. Should the occupier market continue to face headwinds, it is possible that more data points will be able to support any further downward revisions,” said Desmond Sim, CBRE Research Head for Singapore and South East Asia.
JLL noted that “the notable slow-down in private and public land sales in the commercial, residential (both landed and non-landed) and hotel property sectors are mainly accountable for the standstill in the respective use group’s revised DC rates.”
Meanwhile, industrial DC rates were lowered by an average of three percent, with a magnitude ranging from three to four percent for 87 out of 118 sectors.
The biggest drop of four percent applies to areas like Tampines Road, Kaki Bukit, Jurong West, Bedok, Sengkang West and Simei.
“The sedated industrial market over the past six months probably led to minor corrections in the DC rates for industrial. This is the first decrease in DC rates for industrial after having remained unchanged for the last three revisions,” Sim said.
The downward adjustment in the rates for industrial use is also the largest since September 2005, added Dr Chua Yang Liang, Research Head for Singapore and South East Asia at JLL.