PROPERTY groups’ profit margins for Singapore residential developments have whittled down significantly over the years. And this has weighed on the market valuations for the likes of City Developments : C09 0%, UOL Group : U14 0%, GuocoLand : F17 0% and Wing Tai : W05 0%.

Part of the diminishing margins can be attributed to macroeconomic factors, such as inflation and rising interest rates, as well as dampeners in the form of property cooling measures.

However, one often overlooked component is the land betterment charge (LBC) – formerly known as development charge (DC) – that developers in Singapore need to pay to the government if they want to enhance the use of some sites or build bigger projects on them.