Knight Frank Commentary Land Betterment Charge Rate Revisions

Land Betterment Charge Rate Revisions

Use Group A (Commercial)

Commercial Land Betterment Charge (LBC) rates increased by 1.7% across the board, reflecting increments in 46 out of 118 sectors, higher than the 0.5% increase six months ago.

The highest increase in this Use Group was geographical sector 96 (Bayshore, Bedok Camp Area) and this could be contributed by the award of the government land sale (GLS) of a commercial and residential development parcel at Bayshore Drive for S$2.13 billion in July 2026. The top bid reflected a corresponding land rate of S$1,323 psf ppr that came in above expectations, indicating a high degree of conviction in the long-term prospects and the strategic importance of the site as the focal point from which the Bayshore growth area will start.

Use Group B1 (Residential, Landed)

The average land betterment charge rates for landed residential (Use Group B1) rose by 3.5% across 108 geographical sectors across the island, as many landed areas registered moderate price growth in the preceding months.

The URA Price Index for landed homes increased 2.5% in the second quarter of 2025, after a negative 0.4% in Q1 2026. Demand has been and is expected to remain healthy, especially for properties priced between S$5 million and S$10 million, assuming valuations remain reasonable relative to each home's location and attributes. Overall, landed home prices are forecast to appreciate by around 3% to 5% this year.

Use Group B2 (Residential, Non-Landed)

In the non-landed residential Use Group B2, the overall average increased similarly to the landed residential use group by 3.4%, with 70 geographical sectors showing increments.

The highest increases were in geographical sectors 54 (Kallang Bahru, Boon Keng Rd), 55 (Upper Boon Keng Rd) and 56 (Kallang Bahru, Geylang Bahru) with 29.1%, 23.6% and 23.6% gains respectively. The award of the GLS award of Kallang Close for S$1,415 psf per plot ratio (ppr) in April 2026 could have played an influential part in pulling up implied land values in areas around the site.

The increases of 8.7% in geographical sectors 46 (Grange Rd, Irwell Bank Rd, Devonshire Rd), 47 (Killiney Rd, Oxley Rd, River Valley) and 48 (River Valley, Martin Rd, Mohd Sultan) could have been contributed by another GLS site at River Valley Green, sold at a land rate of S$1,730 psf ppr in June 2026.

Use Group D (Industrial, warehousing, science park, business park, etc)

There were increases in LBC rates in all 118 sectors contributing an overall average gain of 3.9% in the industrial Use Group D. This is second consecutive six-month period where all sectors in Use Group D registered increases.

Although there were less industrial sales transactions were recorded in Q2 2026 as activity returned to more normalised levels after Q1 2026 when UI Boustead REIT was listed, sub-S$10 million transactions remained relatively resilient as owner-occupiers continued to seek space for business continuity. The investment momentum into facilities for advanced manufacturing, AI infrastructure and logistics automation is expected to remain firm as global companies increasingly seek safe-haven locations to navigate geopolitical conflicts, political barriers and trade obstacles. This is consistent with Singapore's strong fixed asset investment (FAI) performance in Q2 2026, where manufacturing FAI commitments rose 124.8% q-o-q to S$5.0 billion from S$2.2 billion in Q1 2026, driven largely by electronics investments.

Use Group E (Place of worship, community building, etc)

The LBC rates for Use Group E (Place of Worship / Civic and Community Institution) have increased by 2.9% on average, affecting all sectors, after having increased by a similar 2.8% six months ago. The LBC rates for Use Group E have increased four times consecutively since March 2025, or the last two years. Between September 2014 and March 2025, there were absolutely no increases in any sector in this Use Group.

As competing uses such as residential redevelopment, mixed-use projects and industrial developments continue to command higher land values, civic and community sites could have been re-rated over the past two years to reflect corresponding increases in benchmark land values islandwide.