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The Urban Redevelopment Authority (URA) has raised the development charge (DC) for Use Group A (Commercial) at an average rate of two percent, with increases ranging from five percent to 11 percent.
Effective today, the rate hike applies to 26 out of 118 geographical sectors in Singapore. Notably, the rates remained unchanged for the other 92 sectors
The highest rate hike of 11 percent will apply to Sector 59, which comprises Balestier Road, Thomson Road, Irrawaddy Road, Mandalay Road, Kim Keat Road, Jalan Rajah, Moulmein Road, Whampoa Road, Novena Rise and Novena Terrace.
Dr Chua Yang Liang, JLL’s Head of Research for Southeast Asia, said: Except for industrial as well as landed and non-landed residential, there were rate hikes in all other use groups in Sector 59 which includes the Novena vicinity. “This could have been triggered by the recent strata sales of Balestier Towers and also the continual improvement to the medical facilities and infrastructure in this area.”
At the same time, DC rates for Use Group C (Hotels/Hospitals) rose by nine percent on average, except for sectors 116 and 118 where they remain unchanged.
The largest increase of 10 percent was posted on Sector 51, as well as sectors 95 to 98. The first geographical area consists of Beach Road, North Bridge Road, Republic Avenue, Ophir Road, Crawford Street and Jalan Sultan, while sectors 95 to 98 encompasses Siglap Road, Upper East Coast Road, Marine Parade Road, Bedok Road, New Upper Changi Road, Bedok, Simei area, Tampines, Bedok Reservoir area.
According to JLL, the rate hike in the hotel category came as a surprise, given the low sales activity in 2014 following a bumper year of transactions in 2013.
On the other hand, the DC rates for Use Group D (Industrial/Warehousing) remains unchanged, likewise for use Group B1 (Landed Residential).
Development charges are incurred by property players who wish to build bigger projects on certain sites or enhance their usage.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this and other stories, email nikki@propertyguru.com.sg
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