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04-03-14, 20:48
http://www.straitstimes.com/archive/saturday/premium/money/story/fees-raised-commercial-hotel-sites-20140301
Fees raised for commercial, hotel sites
Residential development charges stay flat, but...
Published on Mar 01, 2014
By Cheryl Ong
THE charges developers pay the Government to enhance a site, to make it more valuable, have been lifted significantly for commercial and hotel plots.
But development charges remained mostly flat for the rapidly slowing residential segment, a move which experts had expected.
These charges, which can run into millions of dollars, are closely watched by developers as they can play a key role in affecting the viability of a project.
In the latest six-monthly review of these charges, out yesterday, the rise in charges was steepest for commercial sites, with a jump of 14.6 per cent on average.
Rates for hotel sites rose by 13.4 per cent on average, but were unchanged for industrial sites.
The charge rose just 1 per cent for sites earmarked for non-landed homes and about 1.1 per cent for landed homes, the Urban Redevelopment Authority (URA) said.
Development charges reflect recent land and property values for the different market segments.
They are applied when the value of a site goes up owing to a re-zoning or when a taller building can be erected after a change in the site's plot ratio.
Consultants said the commercial plot hike may have been caused by newly launched mixed-use projects in the review period. "Overall, the office and retail market didn't jump 15 per cent, but specific launches where new high prices were achieved could have set new records," said Century 21 chief executive Ku Swee Yong.
The steepest hike of 29 per cent for commercial plots was in areas such as Sixth Avenue, Holland Road and Eng Neo Avenue.
Mr Ku said the KAP Residences launch in King Albert Park, where commercial units were sold for an average price of $5,446 per sq ft (psf), could have lifted values.
As for hotel sites, the jump was sparked by landmark deals such as The Westin Singapore, bought by the Daisho Group for $1.5 million per room in December, said Mr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.
Ms Chia Siew Chuin, research and advisory director at Colliers International, said the revision could have been driven by the sale of a plot on East Coast Road for $1,326 psf - 128.8 per cent above the land value imputed by the development charge for that area.
The East Coast and Marine Parade areas have also seen many boutique hotels springing up, underpinning the increase in charges, Mr Ku added.
However, the flat residential and industrial rates were no surprise as both segments have not performed well, consultants said.
"The chief valuer looks at the land prices and transactions in the market to revise the development charge," said Mr Ku.
So recent industrial launches, where prices have been discounted, "couldn't make a mark".
But Ms Chia said recent industrial land transactions indicated that development charges were "trailing behind land prices".
Prices of 15 industrial sites sold in the last six months, for instance, were 18.3 per cent to 73.4 per cent higher than the land values imputed by the development charge. The flat increase in residential development fees also came as no surprise on the back of a lacklustre housing market.
URA data showed prices of non-landed homes fell 0.3 per cent in the six months to Dec 31, weakening from a 2.2 per cent hike in the preceding six months.
Ms Chia said this reflected a halt in overall price increases and a slowdown in the private residential market after tighter borrowing limits were introduced.
For sites slated for non-landed homes, the largest rises were in areas like Paya Lebar, Aljunied, MacPherson and Sims Avenue.
Landed sites with the steepest hikes were in Sengkang, Punggol, MacPherson and Aljunied. The revised charges take effect today.
[email protected]
Fees raised for commercial, hotel sites
Residential development charges stay flat, but...
Published on Mar 01, 2014
By Cheryl Ong
THE charges developers pay the Government to enhance a site, to make it more valuable, have been lifted significantly for commercial and hotel plots.
But development charges remained mostly flat for the rapidly slowing residential segment, a move which experts had expected.
These charges, which can run into millions of dollars, are closely watched by developers as they can play a key role in affecting the viability of a project.
In the latest six-monthly review of these charges, out yesterday, the rise in charges was steepest for commercial sites, with a jump of 14.6 per cent on average.
Rates for hotel sites rose by 13.4 per cent on average, but were unchanged for industrial sites.
The charge rose just 1 per cent for sites earmarked for non-landed homes and about 1.1 per cent for landed homes, the Urban Redevelopment Authority (URA) said.
Development charges reflect recent land and property values for the different market segments.
They are applied when the value of a site goes up owing to a re-zoning or when a taller building can be erected after a change in the site's plot ratio.
Consultants said the commercial plot hike may have been caused by newly launched mixed-use projects in the review period. "Overall, the office and retail market didn't jump 15 per cent, but specific launches where new high prices were achieved could have set new records," said Century 21 chief executive Ku Swee Yong.
The steepest hike of 29 per cent for commercial plots was in areas such as Sixth Avenue, Holland Road and Eng Neo Avenue.
Mr Ku said the KAP Residences launch in King Albert Park, where commercial units were sold for an average price of $5,446 per sq ft (psf), could have lifted values.
As for hotel sites, the jump was sparked by landmark deals such as The Westin Singapore, bought by the Daisho Group for $1.5 million per room in December, said Mr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.
Ms Chia Siew Chuin, research and advisory director at Colliers International, said the revision could have been driven by the sale of a plot on East Coast Road for $1,326 psf - 128.8 per cent above the land value imputed by the development charge for that area.
The East Coast and Marine Parade areas have also seen many boutique hotels springing up, underpinning the increase in charges, Mr Ku added.
However, the flat residential and industrial rates were no surprise as both segments have not performed well, consultants said.
"The chief valuer looks at the land prices and transactions in the market to revise the development charge," said Mr Ku.
So recent industrial launches, where prices have been discounted, "couldn't make a mark".
But Ms Chia said recent industrial land transactions indicated that development charges were "trailing behind land prices".
Prices of 15 industrial sites sold in the last six months, for instance, were 18.3 per cent to 73.4 per cent higher than the land values imputed by the development charge. The flat increase in residential development fees also came as no surprise on the back of a lacklustre housing market.
URA data showed prices of non-landed homes fell 0.3 per cent in the six months to Dec 31, weakening from a 2.2 per cent hike in the preceding six months.
Ms Chia said this reflected a halt in overall price increases and a slowdown in the private residential market after tighter borrowing limits were introduced.
For sites slated for non-landed homes, the largest rises were in areas like Paya Lebar, Aljunied, MacPherson and Sims Avenue.
Landed sites with the steepest hikes were in Sengkang, Punggol, MacPherson and Aljunied. The revised charges take effect today.
[email protected]