Development charges to rise with biggest hikes in industrial and warehouse sectors

Development charges to rise with biggest hikes in industrial and warehouse sectors

By Channel NewsAsia | Posted: 29 February 2008 2002 hrs

 

SINGAPORE: Developers will have to pay more to redevelop non-residential sites such as hospitals, hotels, shops and warehouses.

 

They also have to pay marginally more to redevelop residential sites for condominiums.

 

This is according to the latest revision of development charge rates released by the Ministry of National Development (MND).

 

The biggest hikes came from non-residential sites, which include parcels for hotel and hospital, as well as industrial and warehouse use.

 

The industry and warehouse sector saw the development charge rise 16.8 per cent overall.

 

The most affected was the Tuas Area, which includes Kranji, Lim Chu Kang and Choa Chu Kang.

 

For hotels and hospitals, there’s been a 3.3 per cent rise all round.

 

According to consultants Knight Frank, this was likely fuelled by a hospital site at Novena Terrace and Irrawaddy Road that was sold to the Parkway Group for S$1.2 billion.

 

Knight Frank said locations with the biggest percentage increases include Sungei Seletar, Yio Chu Kang Road, Raffles City and Grange Road area.

 

Commercial sites will see their development charge go up by 1.5 per cent in general, moderating from the high of 42 per cent in September 2007.

 

Consultants CB Richard Ellis (CBRE) said the increases were seen in areas where there were recent land sale transactions.

 

These include the Serangoon Central, Toa Payoh, Braddell Road and Bishan region.

 

CBRE said the hike could be due to the recent award of a commercial site at Lorong 6 Toa Payoh.

 

For the closely-watched development charge for residential plots, rates have gone up 2.6 per cent overall compared with the last review in September.

 

The rise is seen to be not significant, given that the charge has been increased a few times in 2007 as a result of the booming private residential property market.

 

The Thomson, Ang Mo Kio Ave 6 and Choa Chu Kang Road areas saw the sharpest increase – with the charge rising nearly 29 per cent.

 

The increase was due to some collective sales done in the second half of 2007 in fringe areas such as the Thomson Road and East Coast areas.

 

Development charges are paid by developers to enhance the use of sites or build bigger projects on them.

 

The charges are revised every March and September and are based on recent land and property values. –CNA/vm

 

Source: Channel News Asia

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