Industrial properties lead DC rate hike
SINGAPORE — Industrial properties have been hit with the highest pace of development charge (DC) hikes in the second consecutive review by the Ministry of National Development (MND), with the increases spread across many parts of the island.
The new DC rates — taxes payable on the enhancement in land value — will kick in today. The MND conducts its review of the rates across 118 geographical sectors semi-annually in consultation with the Chief Valuer.
The DC rates for industrial and warehousing use rose an average of 15 per cent islandwide, with the largest increase of 29 per cent registered in areas as diverse as Woodlands, Upper Thomson Road, Kim Tian Road and Keppel Road.
Mr Ku Swee Yong, Chief Executive Officer of International Property Advisor, said: “The rates are being raised even further, partly to catch up with the market, and they might even have overdone it slightly.”
“The authorities are clearly tackling the overexuberance in industrial property pricing even with the restrictions on strata sub-division and the shorter leases,” he added.
The closely-watched DC rates for non-landed residential use rose by an average of 5 per cent in the latest review, with the increases ranging from 5 to 28 per cent in 53 sectors and no change for the rest.
The largest increase of 28 per cent is in Sector 74, an area encompassing Kim Tian Road, Tiong Bahru Road, Outram Road and Jalan Bukit Merah, where a S$5,390 per square metre DC is payable. Mr Ku said it was no surprise that the Kim Tian area was hit with the highest DC hike after the record-setting bid for a private residential site there in a Government Land Sales tender in April.
Keppel Land’s Harvestland unit set a record S$1,162.86 per sq ft per plot ratio, the highest for a pure residential site, when it won the tender for the plot near the Tiong Bahru MRT Station for S$550.3 million.
As for en bloc deals, Ms Chia Siew Chuin, Director of Research & Advisory at property consultancy Colliers International, said: “It is unlikely that the latest round of DC rate revisions will impact the residential collective sales market in any significant manner in the next six months.
“Currently, the level of activity in the collective sales market is subdued, and, therefore, the current revision in DC rates is unlikely to make any difference to the collective sales market one way or another.”