Commentary on the Revision of Land Betterment Charge Rates from 1 March 2026

Key Takeaways

• The LBC rates for Use Group A (Commercial) have risen by 0.5%, faster than the 0.1% rise in the previous cycle. 20 out of 118 sectors saw increases ranging from 2.9 – 3.5% while the remaining 98 sectors were flat. This increase was attributed to mostly suburban sectors where several high-value shopping mall transactions took place in the past six months such as The Clementi Mall and Bukit Panjang Plaza. In the meanwhile, we note office-dominant areas such as the CBD and the Orchard Road shopping belt saw no change in LBC rates.
• In general, the Residential use group B’s outperformance in this round reflects the rebound in sentiment across all market segments in private home sales, as well as across landed and non-landed, over the past 6 months. The robust interest came on the back of lower interest rates which have lightened borrowing costs for developers and coupled with stronger-than-expected economic growth, had boosted homebuying sentiment, with new home sales rebounding to a 4-year high of 10,815 units in 2025. 

• B1 (Residential, landed) LBC rates saw a moderate increase of 4.0% on average, picking up from a marginal 0.4% rise in the last round of revision. 93 out of 118 sectors saw a rise in LBC rates ranging from 2.7 – 10.4%, reflecting strong transaction activity in the GCB and landed market amid low interest rates.
• The LBC rates for Use Group B2 (Residential, non-landed) saw growth accelerate after a 0.7% increase in the previous cycle. Rates rose 4.1% on average for Mar 2026. 114 out of 118 sectors rose 2.5 – 22.7%, and only 4 sectors seeing no change. With just 1 small residential collective sale concluded in the preceding half-year, revisions for Group B2 sector largely tracked performance at state land tenders. The highest 22.7% increase came from sector 97, largely reflective of the Bedok Rise site (in the OCR) which received 10 bids and awarded at S$1,330 psf ppr. The previous implied land value for sector 97 had been $1,022 psf ppr. The second highest increase of 10.2% came from sector 37, reflective of the Bukit Timah/Newton site (in the CCR) which saw 8 bids and awarded at S$1,820 psf ppr. The previous implied land value for sector 37 had been $1,635psf ppr. The recent Dorset Road site and Tanjong Rhu site (in the RCR) also received better-than-expected top bids, which supported higher LBC rates in RCR locations.

• The LBC rates for Use Group D (Industrial) rose by 3.2% on average, after posting 1.6% growth in the previous round. The increase was broad-based, with all 118 sectors seeing an increase in LBC rates ranging from 1.9 – 9.3%. This reflects continued strong investor interest in the sector due to its attractive yields. Multiple portfolio deals were also recorded in the period as REITs actively divested their existing assets and redeployed capital into yield-accretive investments.
• Use Group E (Place of Worship/ Civic and Community Institution) saw a broad-based increase of 2.7-3.4% across every geographic sector, the third straight round of broad-based increase. This round’s increase is similar to Sep 2025’s 2.9% increase, averaging at 2.8%. We believe this is a continued gradual adjustment to align with the general real estate sectors, after 10 years of no changes.  
  

Details

Group A

The LBC rates for Use Group A (Commercial) rose marginally by 0.5% on average, faster than the 0.1% increase in Sep 2025. 20 out of the 118 sectors saw an increase in LBC rates ranging from 2.9 – 3.5%, with the remaining 98 sectors seeing no change.

The largest increase of 3.5% came from Sector 116 and 118 which are Jurong Island and Pulau Ubin/ Pulau Tekong, from very low bases of implied land value of S$133 psf ppr as of Sep 2025.

For the rest of 18 sectors, increase was attributed to mostly suburban sectors where shopping mall transactions took place in the half-year while office-dominant areas such as the CBD and the Orchard Road shopping belt saw no change.

Notable increases occurred in the West at sectors 112 (West Coast/ Clementi/ Jurong East/ Toh Tuck/ Bukit Batok) and 113 (Bukit Batok/ Hillview/ Hume/ Cashew/ Bukit Panjang/ Lakeside) which could be attributed to the transaction of The Clementi Mall for $809.00 mil ($4,132 psf) in Dec 2025 and Bukit Panjang Plaza for $428.00 mil ($2,602 psf) in Jan 2026. 

Group B1 (Residential Landed)

Group D (Industrial)