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JTC Assignment of Lease

UPDATED REPORT: 1st Quarter (Jan - March) 2018
Statistics on Total Allocation & Supply of Prepared JTC Industrial Land (Updated Q1 2018)
 
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IMPORTANT ANNOUNCEMENT

HDB will transfer all industrial properties and land to JTC

The transfer of the Housing and Development Board's (HDB) industrial properties and land to JTC Corporation will take effect on 1st January 2018. The transfer was announced in October 2016 and the enabling Jurong Town Corporation (Amendment) Act 2017 passed in Parliament in September.

All 10,700 industrial units and 540 land leases under the HDB will be consolidated under JTC.

 
How to Successfully Apply for 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.
 
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 2012
 SSIC 2010   Industry Description  Industry Average ($psm) 
 10/11/12  Food, Beverages & Tobacco Products  1,514
 13/14/15  Textiles, Wearing Apparel, Leather & Footwear  982
 16  Wood Products   209
 17  Paper Products   488
 18  Printing & Reproduction of Recorded Media   869
 19  Refined Petroleum Products  49
 20  Chemicals & Chemicals Products   457
 21  Pharmaceuticals & Biological Products   7,574
 22  Rubber & Plastic Products  791
 23  Non-Metallic Mineral Products  719
 24  Basic Metals  551
 25  Fabricated Metal Products  813
 26  Computer, Electronic & Optical Products  6,208
 27  Electrical Equipment   1,173
 28  Machinery & Equipment   1,051
 29  Motor Vehicles, Trailers and Semi-Trailers  342
 30  Transport Equipment  1,174
 31  Furniture   717
 32  Other Manufacturing  2,822
   Manufacturing Average  1,309
Note: Above figures are tabulated based on JTC companies that are matched with EDB’s CMA 2012. 

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?

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.
Note: All subletting applications are subject to JTC's consent.

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.

What is the Current JTC's Waterfrontage Site Fees for JTC Industrial Land?

Waterfrontage Fees for JTC's Waterfront Sites

 Location  Waterfrontage Fees: $ per metre run per annum
 Jurong 1,004 to 1,507

Important Notes:
  • Waterfrontage fees are payable for waterfront sites.
  • Under the Rental Scheme, waterfront fee is payable monthly in advance and will be revised on an annual basis to the prevailing JTC rate with a 5.5% escalation cap. The waterfront fees for the further term of 30 years, if any, shall be revised to the prevailing rate.
  • All waterfront fees quoted are subject to the prevailing GST.
  • The waterfront fees and other information contained herein are applicable at the time of printing and are subject to change without prior notice.
  • Rates indicated may change at the point of offer due to changes in market conditions.
JTC Assignment of Lease
Got Questions? Call/SMS/WhatsApp at: 98000001

What is the Current JTC Land Rents and Prices for JTC Industrial Land?


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.

Where to Download JTC Assignment of Lease / JTC Transfer of Lease Form for JTC Property and JTC Industrial Land?

Application for JTC Assignment of Lease


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).