What is the JTC's Terms and Conditions for JTC Assignment of Lease

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.

Please click here for JTC Industrial Land Tender Analysis & Information

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.

JTC Assignment of Lease
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