JTC Subletting Policy

JTC Revised Subletting Policy (with effect from 1 October 2014)
Currently, JTC’s lessees or tenants are allowed to sublet their space to facilitate the co-location of related companies and activities for better synergy. They are also allowed to sublet temporary vacant space to other companies, putting the scarce land resource to productive and optimal use. As lessees or tenants have been allocated the land for their own productive use, they have to continue to occupy the majority of the space. As such, JTC has set a limit on the maximum amount of space lessees are allowed to sublet.

Upon extensive consultation with various industrialists and industry associations, there is general agreement that 30% of the total gross floor area (GFA) is an adequate steady state space for a company to use as a buffer to cater to fluctuating business volumes. As a result, JTC will be adjusting the maximum allowable sublet quantum from 50% to 30% of GFA, with effect from 1 October 2014 onwards  This sublet quantum cap does not apply to lessees subletting to their wholly-owned subsidiary or company in which they have a majority shareholding of at least 51%. In addition, given that tenancies are short term, JTC tenants will no longer be permitted to sublet their space. In the event tenants have excess space, they can renew their tenancy for a lower quantum at the end of their current term.

The changes to the Subletting Policy are reflected as follows:

Affected Parties Current Policy Revised Policy 
End-user Lessees Can sublet up to 50% of GFA per allocation upon Temporary Occupation Permit (TOP), to non-related companies. Can sublet up to 50% of GFA to non-related companies within five years after obtaining TOP, and up to 30% thereafter.



Third-Party Facility Providers
Can sublet up to 50% of GFA per allocation to non-anchor subtenants.

Must sublet at least 50% of GFA per allocation to anchor subtenants

No minimum occupation period for subsequent anchor subtenants.

Can sublet up to 50% of GFA per allocation to non-anchor subtenants within five years after obtaining TOP, and up to 30% thereafter

Must sublet at least 50% of GFA to anchor subtenants within five years from obtaining TOP, and 70% thereafter.

Minimum occupation period of three years for subsequent anchor subtenants.

 JTC’s Tenants

 Can sublet up to 50% of GFA to non-related companies.


 Not allowed to sublet.

End-User Lessees
What is the rationale for capping the sublet quantum at 30% of GFA?
Upon extensive consultation with various industrialists and industry associations, there is general agreement that 30% of total gross floor area (GFA) is an adequate steady state space for a company to use as buffer to cater to fluctuating business volumes.

What is the rationale for allowing the sublet quantum at 50% during the first 5 years after obtaining TOP for new end-user lessees?
The 50% sublet quantum is to cater to new end-user lessees who need time to ramp up their production at their newly developed facilities.

Can the end-user lessee sublet concurrently to both related and non-related subtenants?
Yes. However, the total subletting area to non-related subtenants is capped at 30% of the GFA per allocation.

When will the revised subletting policy take effect? Will there be a grace period?
The revised subletting policy will take effect on 1 October 2014, with a grace period until 31 December 2017 for compliance. This grace period is the length of a typical tenancy term. The impact on end-user lessees is shown Table below - 

Details of Subletting Policy for End-User Lessees
End-User Lessees - Existing 1 July 2014 to 30 September 2014 1 October 2014 to 31 December 2017 From 1 January 2018 onwards
Within 5 years after obtaining first TOPCan apply for new or renew subletting up to 50% of GFA per allocationCan apply new or renew subletting up to 50% of GFA per allocationCan sublet up to 50% of GFA per allocation within 5 years after obtaining first TOP
After 5 years from first TOP and subletting < 30% of GFA per allocationCan apply for new or renew subletting up to 50% of GFA per allocation- Can renew existing subtenants
- Cannot sublet to new subtenants that will result in sublet quantum >30% of GFA per allocation
Must comply with the revised sublet quantum
After 5 years from first TOP and subletting > 30% of GFACan apply for new or renew subletting up to 50% of GFA per allocation- Can renew existing subtenants and to comply with revised sublet quantum of maximum 30% of GFA per allocation by 31 December 2017
- Cannot take on new subtenants that will result in sublet quantum >30% of GFA per allocation
Must comply with the revised sublet quantum
End-User Lessees - NewCan apply for new or renew subletting up to 50% of GFA per allocationCan sublet up to 50% of GFA per allocation within 5 years after obtaining first TOP, thereafter can only sublet up to 30% of GFA per allocationCan sublet up to 50% of GFA per allocation within 5 years after obtaining first TOP, thereafter can only sublet up to 30% of GFA per allocation


Third-Party Facility Providers
What is the rationale for the minimum 70% of GFA to be sublet to anchor subtenants?
Similar to end-user lessees who are required to use most of their space, the intent is for Third-Party Facility Providers to sublet most of their space to quality industrialists that pass JTC’s assessment criteria (“anchor subtenants”). As JTC adjusts the sublet quantum for end-user lessees to a maximum of 30% of their GFA per allocation, we are also aligning the sublet quantum to non anchor subtenants for Third-Party Facility Providers.

What is the Minimum Occupation Period for Subsequent Anchor Subtenants?
Subsequent anchor subtenants of Third-Party Facility Providers will need to comply with a minimum occupation period of three years with effect from 1 October 2014.

What is the rationale for imposing a minimum occupation period for subsequent anchor tenants of Third-Party Facility Providers?
There is currently a minimum occupation period for original anchor subtenants of third party facility providers. This is to ensure that they make meaningful and sustained productive use of the site. In order to align the treatment of anchor subtenants, we will be imposing a 3-year minimum occupation period on subsequent anchor subtenants. The 3-year period is the length of a standard tenancy term in the market and is assessed to be a reasonable period for an anchor subtenant to make sustained productive use of the site.

When will the revised subletting policy take effect? Will there be a grace period?
The revised subletting policy will take effect on 1 October 2014, with a grace period until 31 December 2017 for compliance. This grace period is the length of a typical tenancy term. The impact on Third-Party Facility Providers is shown in Table :

Details of Sublet Quantum for Non Anchor Subtenants
Third-Party Facility Providers - Existing 1 July 2014 to 30 September 2014 1 October 2014 to 31 December 2017 From 1 January 2018 onwards
Within 5 years after obtaining first TOPCan apply new or renew non anchor subletting up to 50% of GFA per allocationCan apply new or renew subletting up to 50% of GFA per allocationCan sublet up to 50% of GFA per allocation to non anchor subtenants within 5 years after obtaining first TOP
After 5 years from obtaining first TOP and subletting < 30% of GFA per allocation to non anchor subtenantsCan apply new or renew non anchor subletting up to 50% of GFA per allocation- Can renew existing non anchor subtenants
- Cannot take on non anchor subtenants that will result in non anchor sublet quantum >30% of GFA per allocation
Must comply with the revised sublet quantum
After 5 years from obtaining first TOP and subletting > 30% of GFA per allocation to non anchor subtenantsCan apply new or renew non anchor subletting up to 50% of GFA per allocationCan renew existing non anchor subtenants and to comply with revised sublet quantum of maximum 30% of GFA per allocation by 31 December 2017
- Cannot sublet to new non anchor subtenants that will result in sublet quantum >30% of GFA per allocation
Must comply with the revised sublet quantum
Third-Party Facility Providers - NewCan apply new or renew non anchor subletting up to 50% of GFA per allocationCan sublet up to 50% of GFA per allocation to non anchor subtenants within 5 years after obtaining first TOP, thereafter to reduce to 30% of GFA per allocationCan sublet up to 50% of GFA per allocation to non anchor subtenants within 5 years after obtaining first TOP, thereafter to reduce to 30% of GFA per allocation
For the space displaced by non anchor subtenants, they can be occupied by approved anchor subtenants. Third-Party Facility Providers will be given until 31 December 2017 to increase the sublet quantum to anchor subtenants to 70% of GFA per allocation.

Note: All subletting applications are subject to JTC's consent.
While every endeavour has been made to ensure that the information provided herein is correct, ALLIANCE FACILITIES MANAGEMENT PTE LTD disclaims liability for any damage or loss that may be caused as a result of any error or omission.
 
Application Form Download - JTC Subletting Application Form

Application for JTC Subletting Form