Commentary on the Revision of Land Betterment Charge Rates from 1 March 2025

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

The Singapore Land Authority (SLA) has revised the Land Betterment Charge (LBC) rates for the period of 1 March 2025 to 31 August 2025. The review is carried out on a half-yearly basis in consultation with the Chief Valuer. 

LBC rates rose on average for Use Groups A – D, led by Use Group B1 (Landed Residential) at 2.9%. Use Group A (Commercial) and Use Group C (Hotel/Hospital) both saw the same increase of 0.6% while Group B2 (Residential, non-landed) and Group D (Industrial) saw marginal increases of 0.3% and 0.1% respectively. 

Our Analysis

• The LBC rates for Use Group A (Commercial) have risen by an average 0.6%, after growing 1.5% rise in the previous cycle. 22 out of 118 sectors saw an increase ranging from 2 – 6.3%. LBC rates for Office-dominant sectors such as those in the Central Business District (CBD) were flat, in line with the flat rents CBRE observed, while the non-award of the mega white site at Jurong Lake District (JLD) meant there were no benchmark changes in that sector as well. Hence, the rise in LBC rates was mainly seen in the Orchard area, where retail benefitted from demand from both leisure and business travellers, with the major transaction in ION Orchard setting a benchmark.

• B1 (Residential, landed) LBC rates saw a moderate increase of 2.9% on average, after a similar 2.8% rise in the last round of revision. The latest was a broad-based increase with all 118 sectors seeing a rise in LBC rates ranging from 2.6 – 3.7%. This is despite the 3.5% decline in the landed price index in 2H 2024. 

• The LBC rates for Use Group B2 (Residential, non-landed) have stabilised, increasing by 0.3% on average after rates fell 5.4% on average in Sep 2024. The performance among different locations was stable, with 9 out of 118 sectors seeing an increase ranging from 2.6 – 4.4% and the remaining 109 out of the 118 sectors observing no change. Apart from the return of collective sales with the transaction of Thomson View Condominium, revisions for Group B2 sector largely tracked performance at state land tenders. While developer sentiment for public sites remains cautious, there was generally more participation and optimistic bids seen in Q4 2024 tenders relative to the prior 9 months amid a recovery in buying sentiment and rebound in new home sales following interest rate cuts. In particular, the recent tender for the land parcel at River Valley Green (Parcel B) was met with the healthiest participation among prior sites in the vicinity during the closing of its tender and a top bid above expectations.  

• The LBC rates for Use Group C (Hotel/Hospital) rose by 0.6% on average, after increasing 0.6% as well in the previous round. Performance was rather split among sectors however, with 13 out of the 118 sectors seeing moderate to sharp increase in rates of ranging from 3.8 – 8.8% while the remaining sectors saw no change. Interest in hotels remains resilient with tourism recovery, with some investors looking to convert existing properties to hotels/ serviced apartments.

• The LBC rates for Use Group D (Industrial) rose by 0.1% on average, after remaining flat in the previous round. Only 6 out of the 118 sectors saw an increase in LBC rates ranging from 1.9 – 3.1%, with the remaining 112 sectors seeing no change. Industrial transactions have been buoyant in 2024 with prices largely holding up. The adjustments could be due to a few large transactions such as Admirax, 2 Tuas South Link 1 and 21 Jalan Buroh.

Group A
The LBC rates for Use Group A (Commercial) have increased by 0.6% on average, slower than the increase of 1.5% in Sep 2024. 22 out of the 118 sectors saw an increase in LBC rates ranging from 2.0% to 6.3%, with the remaining 96 sectors seeing no change. 

The largest increase of 6.3% stemmed from Sector 42 (Orchard Road/ Orchard Turn/ Scotts/ Claymore), within which a 50% stake in ION Orchard transacted for $1.849 bn ($5,928 psf on NLA) in Sep 2024. 

The next largest increases were also in the same vicinity, with Sectors 41 (Bideford/ Cuppage/ Kramat/ Koek/ Killiney/ Somerset/ Exeter) and 43 (Cuscaden/ Tomlinson/ Traders Hotel/ Tanglin Mall) rising 5.3% and 4.2% respectively. Sector 41 saw the collective sale transaction of Concorde Hotel and Shopping Mall for $821 mil ($1,804 psf ppr) in Nov 2024, which assumes the site is rebuilt to include a hotel on 40% of GFA, residential use for another 40%, and commercial use for the remaining 20% of GFA.

Notable revisions to LBC rates for Use Group A 

Sector	Percentage change
42 (Orchard Road/ Orchard Turn/Scotts/Claymore)	+6.3%
41 (Bideford/ Cuppage/ Kramat/ Koek/ Killiney/ Somerset/ Exeter)	+5.3%
43 (Cuscaden/ Tomlinson/ Traders Hotel/ Tanglin Mall)	+4.2%

Source: CBRE Research, URA

Group B2 (Residential Non-Landed)
The LBC rates for Use Group B2 (Residential, non-landed) have risen by 0.3% on average, rebounding from a 5.4% decline in Sep 2024. The performance among different locations was stable, with 9 out of 118 sectors seeing an increase ranging from 2.6 – 4.4% and the remaining 109 out of the 118 sectors observing no change. The largest increase of 4.4% applied to Sector 48 (Yong An Pk/Jln Kuala/River Valley Close) and adjacent sectors 46 (Leonie Hill/St Thomas Walk/Devonshire Road) and 47 (Dublin Road/Lloyd Road/Oxley Gdn/Oxley Walk)

Notable revisions to LBC rates for Use Group B2

Sector	Percentage change
48 (Yong An Pk/Jln Kuala/River Valley Close)	+4.4%
107 (Sembawang/Springleaf/Tagore/S'wang Hills/Thomson/Reservoirs)	+2.7%

Source: CBRE Research, SLA

The largest increase seen in Sector 48 could be due to healthy interest at River Valley Green (Parcel B) GLS site which received 5 bids and was awarded in Feb 2025 to a unit of GuocoLand for $627.84 mil ($1,420 psf ppr). This was the healthiest participation observed among comparable prior sites in the vicinity.  

Another notable increase of 2.7% was observed at Sector 107 (Sembawang/Springleaf/Tagore/S'wang Hills/Thomson/Reservoirs), likely tied to the collective sale of Thomson View Condominium acquired by a joint venture between UOL and CapitaLand for $810.00 mil ($1,178 psf ppr). It was the only pure residential collective sale recorded in 2024, after the dearth of residential collective sale activity since Q2 2023 since the increased ABSD under Apr 2023’s round of cooling measures took effect. 

Group C (Hotels and Hospitals)
LBC rates for hotels and hospitals in this cycle rose by an average of 0.6%, similar to the average of 0.6% in Sep 2024. Only 13 out of 118 sectors saw an increase in LBC rates ranging from 3.8% to 8.8%, with the remaining 105 sectors seeing no change. 

The largest increase of 8.8% stemmed from Sectors 93 (Jln Seaview/ Peach Gdn/ Amber/ Parkway/ Marine Parade) and 94 (Cassia/ Old Airport/ Haig/ Joo Chiat/ Telok Kurau/ Frankel/ Siglap). The increase could be due to Katong Plaza which was collectively sold for $180.00 mil ($1,809 psf ppr) in Oct 2024. URA has granted permission for redevelopment into a 340-room hotel.

Notable revisions to LBC rates for Use Group C

Sector	Percentage change
93 (Jln Seaview/ Peach Gdn/ Amber/ Parkway/ Marine Parade)	+8.8%
94 (Cassia/ Old Airport/ Haig/ Joo Chiat/ Telok Kurau/ Frankel/ Siglap)	+8.8%

Source: CBRE Research, SLA

Group D (Industrial)
LBC rates for industrial in this cycle rose marginally by an average of 0.1%, after remaining flat the previous cycle. Only 6 out of the 118 sectors saw an increase in LBC rates ranging from 1.9 – 3.1%, with the remaining 112 sectors seeing no change. This could be attributed to a few large transactions as investors continue to be drawn to the asset class due to its positive carry.

Sector 115 (Pierce & Seletar R./ Mandai/ Ulu S'wang/ Marsiling/ Senoko) saw the largest increase of 3.1%, while Sectors 100 (Tampines/ Jln Halus/ Punggol 21/ Sengkang/ Hougang) and 114 (C. C.Kang/ S.Kadut/ Kranji/ Lim C.Kang/ Jln Bahar/ Tuas/ Jln Buroh) saw increases of 2.0%. 

Some of the transactions that could have lent support to the rise in LBC rates include the sale of Admirax (Sector 115) for $155.00 mil ($325 psf on NLA), 2 Woodlands Industrial Park E1 (Sector 115) for $13.01 mil ($1,134 psf on land), 2 Tuas South Link 1 (Sector 114) for $140.25 mil ($199 psf on GFA) and 21 Jalan Buroh (Sector 114) for $112.80 mil ($262 psf on GFA).

Sector	Percentage change
115 (Pierce & Seletar R./ Mandai/ Ulu S'wang/ Marsiling/ Senoko)	+3.1%
100 (Tampines/ Jln Halus/ Punggol 21/ Sengkang/ Hougang)	+2.0%
114 (C. C.Kang/ S.Kadut/ Kranji/ Lim C.Kang/ Jln Bahar/ Tuas/ Jln Buroh)	+2.0%

Source: CBRE Research, SLA

Read the SLA press release here.