THE fees developers pay to enhance the use of residential sites have been raised as expected but were left unchanged for commercial plots - a move that surprised consultants.
Development charge rates rose by 7 per cent on average for sites earmarked for landed homes and by around 5 per cent for non-landed units, the Urban Redevelopment Authority said yesterday.
Rates for industrial use rose by 15 per cent on average but were unchanged for land for commercial property, hotel and hospital use.
Development charges, which are reviewed every six months, reflect recent land and property values for various market segments. They are applied when the value of a site goes up due to rezoning or if a higher building can be erected after a change in the plot ratio.
Consultants had expected rates for commercial plots to be raised.
"It's very counter-intuitive because the strata retail segment has shown the strongest price increase over the past six months," said Savills Singapore research head Alan Cheong.
Colliers International research and advisory director Chia Siew Chuin said various land sales during the review period had indicated that development charges were "trailing behind land prices" in the commercial segment.
For instance, a 99-year leasehold commercial site in Venture Avenue sold for $1,009 per sq ft (psf) per plot ratio (ppr) in March - 25.7 per cent above the land value imputed by the development charge for that geographical area.
Another example is the collective sale of Bright Chambers, a commercial building in Middle Road, at about $1,076 psf ppr in April, about 70 per cent above the imputed land value.
The average rate for commercial plots leapt 24 per cent in March's rate revision and consultants predicted this week that further increases of 3 per cent to 10 per cent were likely in this round.
They declined to speculate on why commercial land charges were left unchanged, although Mr Chia said it was unlikely that it was due to fears the economy was slowing as charges for industrial sites were lifted.
Industrial land rates rose by 15 per cent on average. The largest hike of 29 per cent was in areas such as Woodlands, Sin Ming industrial estate and Keppel Road.
Jones Lang LaSalle research head Chua Yang Liang said the upward revision for residential and industrial sites could be a "move to minimise the potential outflow of hot money from the commercial and hotels back into industrial and residential".
Charges for residential landed sites jumped by between 5 per cent and 13 per cent for 76 out of 118 geographical sectors. The other 42 sectors saw no change.
The average increase of 7 per cent was greater than the 0 per cent to 5 per cent figure consultants predicted earlier this week.
The largest rate hike of 13 per cent was in areas such as Telok Kurau, Marine Parade, Killiney Road and Tanglin Road.
Fees for non-landed residential plots rose by 5 per cent to 28 per cent for 53 out of 118 geographical sectors but were unchanged for the other 65 segments.
The average increase of 5 per cent was in line with Jones Lang LaSalle's forecast earlier this week of 3 per cent to 5 per cent.
The biggest increase - 28 per cent for non-landed residential sites - was in areas such as Kim Tian Road, Tiong Bahru Road and Jalan Bukit Merah.
Average hike in development fee
Landed home sites
Non-landed home sites
Get a copy of The Straits Times or go to straitstimes.com for more stories.