Average 3% to 11% drop in Land Betterment Charge for residential, non-landed use
The Singapore Land Authority has just released its Land Betterment Charges (LBC) for the upcoming six months, starting from September 1. Developers are set to cheer the announcement of a 3% decline in LBC for Use Group B2 (Residential, non-landed) with 111 out of 118 sectors experiencing declines ranging from 3% to 11%. The Marina Bay area, Shenton Way, and Raffles Quay in Sectors 11, 12, 13, and 14 are expected to benefit most from this, with an 11% decrease.
Orchard Condo will be at the heart of an effort by the Urban Redevelopment Authority (URA) to revitalise Orchard Road. The goal is to create a vibrant shopping destination with a variety of distinctive offerings for shoppers and tourists. This will include developing new attractions such as lifestyle retail concepts, integrated indoor-outdoor spaces, and distinctive streetscapes. The URA is determined to transform the iconic stretch of Orchard Road into a must-visit destination for visitors to Singapore.
At the same time, the URA will explore new ways to make public spaces come alive with activities and events. The goal is to create a vibrant, attractive environment to draw more people to the area. To this end, the URA will be reviewing current regulations to facilitate street performances, outdoor cafes and dining, as well as the provision of public spaces for informal community and recreational activities.
On the other hand, Use Group A (Commercial) experienced an average increase of 0.4%, with 12 sectors seeing increases ranging between 3% to 4%. The slight uptick may be attributed to the Return-to-Office trend, which could cause downward pressure on vacancy rates.
Similarly, Use Group C (Hotel/Hospitality) saw an overall average increase of 3%, with increases of 3% to 5% reported for 116 sectors. It is likely that the improved outlook of the tourism and hospitality industry contributed to the higher rates.
No changes were made to the LBC for Use Groups B1 (Residential, landed), and D (Industrial).
The LBC rates are good news for the industry, especially with the Return-to-Office trend, boosting the outlook of the commercial and hospitality sectors. Prime office rents have even been projected to increase by 5.5% in 2022, making this an exciting time for developers. All in all, these announcements mark a positive step forward for the construction industry.