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

• The LBC rates for Use Group A (Commercial) have risen by 0.1%, slower than the 0.6% rise in the previous cycle. 4 out of 118 sectors saw an increase of 3.3% while the remaining 114 sectors were flat. Office-dominant sectors such as those in CBD remained flat, while sectors in the main shopping belt such as Orchard were flat after increases the previous round.
• B1 (Residential, landed) LBC rates saw a marginal increase of 0.4% on average, easing from a moderate 2.9% rise in the last round of revision. 13 out of 118 sectors saw a rise in LBC rates ranging from 2.8 – 5.2%, reflecting rising demand in the traditional landed enclaves in Holland Road, Bukit Timah and Thomson Road.
• The LBC rates for Use Group B2 (Residential, non-landed) saw faster growth after stabilising in the previous cycle, recording 0.7% growth on average after rates rose 0.3% in Mar 2025, stabilising from a 5.4% fall in Sep 2024. The performance among different locations was varied, with 19 out of 118 sectors seeing an increase ranging from 1.7 – 15.4%, 1 sector observing a 3.7% decline and the remaining 98 sectors seeing no change. In the absence of residential collective sales concluded in the preceding half-year, revisions for Group B2 sector largely tracked performance at state land tenders which have recently seen stronger participation especially for sites with attractive attributes. This comes on the back of lower interest rates which have lightened borrowing costs for developers and boosted homebuying sentiment as mortgage rates have also come down, with new home sales rebounding in Q3 2025 so far alongside the slew of new project launches.
• The LBC rates for Use Group D (Industrial) rose by 1.6% on average, after remaining largely flat, posting 0.1% growth in the previous round. 45 out of the 118 sectors saw an increase in LBC rates ranging from 2.6 – 9.9%, with the remaining 73 sectors seeing no change. This could be attributed to multiple large transactions at benign valuations as investors continued to be drawn to the asset class due to its attractive yields.
• Use Group E (Place of Worship/ Civic and Community Institution) saw a broad-based increase of 2.7-3.5% across every geographic sector, the second straight round of broad-based increase. This round is a slowdown from March 2025’s average 5.8% increase. We believe this is a continued gradual adjustment to align with the general real estate sectors, after 10 years of no change.

Details

Group A

The LBC rates for Use Group A (Commercial) rose marginally by 0.1% on average, slower than the increase of 0.6% in Mar 2025. Only 4 out of the 118 sectors saw an increase in LBC rates of 3.3%, with the remaining 114 sectors seeing no change. Office-dominant sectors such as those in CBD remained flat, while sectors in the main shopping belt such as Orchard were flat after increases the previous cycle.

The 4 sectors with increases include sector 115 (Peirce & Seletar Reservoirs/ Mandai/ Sembawang/ Marsiling/ Senoko) which saw the sale of Northpoint City South Wing, valued at $1.133bn ($2,349 psf on GFA), in Mar 2025. The rest of the increases occurred in the West: sectors 111 (Queenstown/ Portsdown/ Ayer Rajah/ Buona Vista/ Kent Ridge/ Pasir Panjang), 113 (Bukit Batok/Hillview/Hume/Cashew/Bukit Panjang/ Lakeside) and 114 (Choa Chu Kang/Sungei Kadut/Kranji/Lim Chu Kang/Jalan Bahar/Tuas). All 4 sectors saw their LBC rate rise 3.3% to $10,850 per sqm, after a similar 3.4% rise in the March 2025 exercise.

Notable revisions to LBC rates for Use Group A

Group B2 (Residential Non-Landed)

Group D (Industrial)