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JTC Assignment of Lease

How to Successfully Apply for JTC Approval for JTC Assignment or JTC Transfer of the lease?
JTC Assignment or JTC Transfer of lease refers to the transfer of estates, rights, title and interests in the property from the "Assignor or Transferor" (seller) to the "Assignee or Transferee" (buyer). The policy ensures that industrialists who have leased industrial land based on their proposed business plans remain committed to them for a sustained and reasonable period of time while allowing lessees to exit on grounds of genuine business needs.

Generally, this can be classified into the following categories:
  • Outright sale of factory premises plus leasehold improvements to a prospective buyer
  • Corporate restructuring and/or assignment or transfer of lease of property to a related or joint-venture company where there is shareholding relationship between the assignor or transferor company and the assignee or transferee company
  • Inclusion or withdrawal of partners within firm (Applicable for sole-proprietorship or partnership only)
  • Conversion of legal entities from sole-proprietorship or partnership to private limited company and vice-versa
  • Taking over of business as an ongoing concern, this involves a transfer of the manufacturing facilities, plant and machinery, and staff. The buyer will assume all business interests formerly undertaken by the seller. There is essentially no change in the existing approved site activities.
  • Sale and leaseback arrangement, where the industrialist assigns the property to a third-party facility provider and in turn rents it back again from the third-party facility provider for its continual usage. The intention is generally to facilitate off-balance financing.

Frequently Asked Questions (FAQ)

What is the JTC's Guidelines for JTC Assignment of Lease / JTC Transfer of Lease for JTC Industrial Land?

The information listed below is to be used as a reference only. All applications are subject to final approval by JTC at JTC's discretion (including any terms and conditions that JTC may in its discretion impose with such final approval).
  • Applicants are to submit a detailed business plan in support of the application submitted
  • JTC has not commenced any legal action against you.
  • You currently do not have any outstanding rent or monies to be settled with JTC.
  • You are not in breach of any term, condition or covenant of the tenancy or lease agreement.
  • You are not carrying out any open land/ unauthorised subletting.
  • You and the Assignee/ Transferee (Buyer) comply with other Government Agencies' rules and regulations (e.g. URA's 60:40 usage quantum).
  • Your existing usage and the Buyer's proposed usage is Industrial or Warehousing.
  • The Buyer's proposed usage complies with JTC's usage guidelines (i.e. usage should be compatible with JTC's usage zoning/ URA's land use zoning and does not fall within the Negative List or Further Assessment List etc) and does not comprise of dormitories.
  • CBPU must have cleared the Buyer's proposed usage.
  • PUB must have cleared the Buyer's proposed water consumption if the Buyer is applying for NEWater/ Industrial Water usage or if the potable water consumption exceeds 500 cubic meters per month.
  • You have fulfilled the Plot Ratio (if any) and investment criteria stipulated in the Building Agreement, your remaining lease term is more than 5 years and you are not within the Prohibition or Restriction Period.
What are the Key Criteria for JTC Assignment of Lease for JTC Factory and Industrial Land?
Industrial Land productivity is one of the key criteria when JTC is considering applications for renewal of lease or to purchase or rent their facilities.

Annual Land Productivity Statistics - Value-Added Per Square Metre of Manufacturing Industries 2015
 SSIC 2010   Industry Description  Industry Average ($psm) 
 10/11/12  Food, Beverages & Tobacco Products 1,880
 13/14/15  Textiles, Wearing Apparel, Leather & Footwear 871
 16  Wood Products  236
 17  Paper Products  618
 18  Printing & Reproduction of Recorded Media  746
 19  Refined Petroleum Products 314
 20  Chemicals & Chemicals Products  989
 21  Pharmaceuticals & Biological Products  8,272
 22  Rubber & Plastic Products 945
 23  Non-Metallic Mineral Products 850
 24  Basic Metals 281
 25  Fabricated Metal Products 836
 26  Computer, Electronic & Optical Products 10,057
 27  Electrical Equipment  1,549
 28  Machinery & Equipment  1,341
 29  Motor Vehicles, Trailers and Semi-Trailers 549
 30  Transport Equipment 1,333
 31  Furniture  768
 32  Other Manufacturing 3,799
   Manufacturing Average 1,714
Note: Above figures are tabulated based on JTC companies that are matched with EDB’s CMA 2015. 

What is the JTC's Terms and Conditions for JTC Assignment of Lease / JTC Transfer of Lease for JTC Property and JTC Industrial Land?

  • Assignment Prohibition Period for Lessees
Industrial lessees are required to fulfil the investment and plot ratio requirements (if any) stipulated in the Building Agreement/ Schedule of Building Terms/ Agreement for Lease, as well as to occupy the leased premises for a minimum period (“Assignment Prohibition Period”) before they are eligible to sell the property in the open market. The assignment prohibition periods are as follows:

  • Assignment Prohibition Period (i.e. duration in which Lessee is not allowed to assign)


New Lessees and Lessees with Approved Lease Renewals (lease tenures of up to 30 years)
 New Lessees :
During investment period and 5 years thereafter

Lessees with Renewed Tenure :
During investment period and 5 years thereafter, or 3 years from commencement of renewed term, whichever is later



Buyers who have purchased JTC facilities from the secondary market
 
Leases with ≤ 30 Years Remaining :
5 years from date of legal completion of assignment

Leases with > 30 Years Remaining :
10 years from date of legal completion of assignment

All Lessees :
Leases with < 5 years remaining

  • Minimum Occupation Period for Approved Anchor Tenants in a sale-and-leaseback programme
The lessee may assign to a third party facility provider after the assignment prohibition period provided that it leases back at least 50% of the gross floor area and minimally 1,500sqm for a minimum occupation period as follows:


Anchor tenant (i.e. the lessee) in new sale-and -leaseback programme
 
Leases with ≤ 30 Years Remaining :
5 years from date of legal completion of assignment

Leases with > 30 Years Remaining :
10 years from date of legal completion of assignment
 
  • Time Line for Completion
The proposed assignment/ transfer should be completed within 3 months from the date of JTC's consent if the Environmental Baseline Study (EBS) is not stipulated as a requirement in the consent. For cases where EBS is required prior to legal completion, the proposed assignment/ transfer should be completed within 6 months from the date of JTC's consent. Any extension of the completion date is subject to JTC's assessment and approval, at JTC's discretion. 
 
  • Right of First Refusal (ROFR) upon subsequent assignment/ transfer of lease
A lessee (Buyer) with the ROFR clause in the contract who intends to assign/ transfer the lease, is required to notify JTC and to make a written offer to JTC. The offer price should come with a valid valuation report. JTC will make an assessment and decide whether to exercise the right.

If JTC exercises the right to buy the premises, JTC will negotiate with the lessee on a price that will be acceptable to both parties. JTC's buy-back price will be based on prevailing market value.

If JTC does not exercise the right, the lessee can proceed to apply for assignment to other parties. However the lessee is not allowed to sell the premises at less than the offer price to JTC within 3 months from the date JTC rejects exercising the right. If the assignment to other parties within the 3 months period is not successful, subsequent intention to assign/ transfer the premise will have to go through the process of notifying and making a written offer to JTC.
 
  • Rectification of Breaches
It is the lessee's responsibility to ensure that he does not breach any of the lease terms, covenants or conditions, and observes and performs all his obligations. 

The proposed Buyer is advised to check with the Seller whether there are any breaches, and whether all breaches have been rectified. If, before or after completion of the assignment or transfer of lease, JTC finds any breach which has not been rectified or discovers any breach, JTC reserves the right to require the lessee to rectify and remedy the breaches.

Thus, JTC will look to the Seller to rectify if it is before completion of the assignment/ transfer. But once completion of the assignment or transfer of lease takes place, JTC will look to the assignee or transferee (Buyer) to remedy all breaches which have either yet to be rectified or are discovered after completion of assignment/ transfer.
 
  • Resolutions
Both Seller and proposed Buyer are required to submit to JTC a copy of their resolutions for the sale of the property. JTC will provide a standard format for the buyer's resolution. Resolutions are only required in the case of private limited companies.
JTC Assignment of Lease
Got Questions? Call/SMS/WhatsApp at: 98000001

What is in the JTC's Letter of Acceptance for JTC Assignment of Lease / JTC Transfer of Lease for JTC Property and JTC Industrial Land? 

  • From the Assignor/Transferor (Seller):
Letter of acceptance of the terms and conditions in the consent letter;

Administrative fee(s) for the assignment/ transfer of lease application and accompanying change/ extension of use (if applicable). All fees are subject to prevailing GST;

Certified true copy of the resolution (not applicable to partnership or sole-proprietorship);

Letter of undertaking from solicitor;

Any outstanding Certificate of Statutory Completion (CSC) for existing buildings and structures (if applicable);

Letter of confirmation pertaining to subletting (if applicable).

  • From the Assignee/ Transferee (Buyer):
Letter of acceptance of the terms and conditions in the consent letter;

Certified true copy of the resolution (not applicable to partnership or sole-proprietorship);

Duly completed GIRO authorization form;

Memorandum of Articles and Associations (not applicable to partnership or sole-proprietorship);

Certificate of incorporation (not applicable to partnership or sole-proprietorship) or certificate of registration (for limited liability partnerships);

Letter of undertaking from assignee/ transferee (applicable for inclusion or withdrawal of partners or conversion to Pte Ltd).
JTC Assignment of Lease
Got Questions? Call/SMS/WhatsApp at: 98000001

What is the Current JTC's Subletting Policy for JTC Industrial Land?

What is JTC Right of First Refusal (ROFR)?

In land scarce Singapore, constant rejuvenation of land use is essential to enhance land use optimisation. To facilitate overall land use planning and developmental needs, JTC will impose ROFR clause for new contracts to allow JTC the right to buy back the property should the lessee intend to assign/sell the premises.

With effect from 15 April 2010, ROFR clause will be included in the lease for new allocation, lease renewal and lease assignment cases.

How does the ROFR work?

When a lessee (with the ROFR clause in the contract) wants to assign/sell the premises, he should notify JTC and make a written offer to JTC. The offer price should come with a valid valuation report. JTC will make an assessment and decide if JTC wants to exercise the right.

  • If JTC exercises the right to buy the premises, JTC will negotiate with the lessee on a price that will be acceptable to both parties. JTC's buy-back price will be based on prevailing market value.
  • If JTC does not exercise the right, the lessee can proceed to apply for assignment to other parties. However, the lessee is not allowed to sell the premises at less than the offer price to JTC within 3 months from the date JTC rejects exercising the right. 
  • If the assignment to other parties within the 3 months period is not successful, subsequent intention to assign/sell the premise will have to go through the process of notifying and making a written offer to JTC.
The information listed above is to be used as a reference only. All applications are subject to final approval by JTC at JTC's discretion (including any terms and conditions that JTC may in its discretion impose with such final approval).

Statistics on Gross Allocation & Return of Prepared JTC Industrial Land and Ready-Built Facilities by Industry (Updated 2 Quarter 2018)

Statistics on Gross Allocation of JTC Ready-Built Facilities by Industry (2Q 2017 - 2Q 2018)  Statistics on Gross Allocation of JTC Prepared Industrial Land by Industry (2Q 2017 - 2Q 2018)

 Statistics on Return of JTC Ready-Built Facilities by Industry (2Q 2017 - 2Q 2018)  Statistics on Return of JTC Prepared Industrial Land by Industry (2Q 2017 - 2Q 2018)
JTC Assignment of Lease