UPDATED REPORT: 2nd Quarter 2018 - Statistics on Gross Allocation and Return of JTC Ready Built Facilities and JTC Prepared Industrial Land by Product Segment
Frequently Asked Questions (FAQ) How to Successfully Apply for Approval for JTC Lease Renewal and JTC Extension of Lease?
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.
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What are the Guidelines for JTC Renewal of Lease / Extension of Lease for JTC Industrial Land Lease?
- When to apply for JTC Lease Renewal / Extension of Lease for JTC Property / Industrial Land?
JTC's Customer Engagement Officers will get in touch with you about 6 years before the expiry of your lease to discuss your business plans moving forward. If you intend to continue operations on site, you are encouraged to apply for lease renewal at least 3 years before the expiry of your lease. This will help you in the planning of your prospective investments and provide an adequate length of time to plan for relocation in the event you are not granted renewal.
- What is Fixed Asset Investment (FAI) JTC Renewal of Lease / Extension of Lease for JTC Property / Industrial Land?
Fixed Asset Investment in new Plant and Machinery (P&M), Building and Civil Works (B&C) and Refurbishment are required when you renew your lease to ensure that your land will continue to be used productively. For buildings and structures that you intend to retain, it is necessary to carry out refurbishment works as specified by JTC. These could include upgrading of façade and minor repair, resurfacing of driveway and minor repairs, and erection of new fencing or gate. To discourage lessees from declaring investment amounts that exceed their intended investments, the lease term shall be pro-rated in the event of a shortfall between what was declared and the actual total investments made at the expiry of the investment period.
- What is the Minimum Gross Plot Ratio (GPR) for JTC Renewal of Lease / Extension of Lease for JTC Property / Industrial Land?
You are required to meet the minimum gross plot ratio for the proposed lease renewal to optimise your land use. One way to meet the minimum Gross Plot Ratio (GPR) is to reduce the land area of your site. You may consider applying for the various incentive schemes for land intensification, including: Land Intensification Allowance (LIA) is administered by EDB. Applicants are required to meet the GPR benchmark and other qualifying criteria.Land Productivity Grant (LPG) helps to defray consultancy fees and/or domestic or overseas relocation costs for companies restructuring their operations to achieve land intensification or savings of at least 0.1 hectare in Singapore, in addition to other qualifying criteria.
- Productivity and Strength of Proposed JTC Business Plan.
You need to ensure that you have good productivity in your existing and future use of your land, floor space and labour. These criteria include the value added to the economy, creation of good jobs, linkages with other industries as well as the strength of the business plan.
- Proposed usage for JTC Renewal of Lease / Extension of Lease for JTC Property / Industrial Land?
Industrial Leases : Your proposed usage must meet the Urban Redevelopment Authority's 60:40 space utilisation rule i.e. at least 60% of your total gross floor area is used for industrial activities. You must also comply 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).
Warehousing leases : At least 60% of your total gross floor area is used for warehousing activities i.e. for storage and distribution of goods. You must also comply 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).
If your site is affected by redevelopment plans, you may not be able to renew your lease. Please contact your Customer Engagement Officer to discuss this matter before proceeding with your application.
You should not be in breach of any term and condition in the lease. In the event you are in breach (examples include erecting unauthorised structures, illegal dormitories, unauthorised occupation and rental arrears), you are required to rectify these before you apply for lease renewal.
Your existing and proposed use should maximise the available floor space. If you are unable to do so, you may wish to consider consolidating your operations in a smaller floor space.
- Availability of Other Premises for Consolidation
If you have other industrial premises, you are encouraged to explore consolidating your operations to maximise your land use. You may also return part of your land to JTC.
Fulfillment of all the guidelines does not necessarily constitute consent from JTC for a lease renewal. In assessing your application, JTC is required to ensure that your premises will be put to the best possible use by renewing your lease and that you will be able to maximise your productivity in the extended lease term.
What Information is needed for Application for JTC Renewal of Lease / Extension of Lease for JTC Factory and Industrial Land?
You will need the following information/documents to complete the application.
All applicants
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- Updated company profile from Accounting & Corporate Regulatory Authority (ACRA)
- Certificate of Incorporation or Certificate of Registration from ACRA
- National Environment Agency’s (NEA) – Central Building Plan Unit approval for Industrial Allocation
- Full business plan with details of your company’s products/services, to support your application
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Land and Standard Factory customers only
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- Company’s latest annual report or audited accounts
- Process flow chart with Plant & Machinery details
- Existing and proposed site layout plan, artist impression, perspective drawings of new buildings (if any)
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Trust and investment fund customers only
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- Copy of Business Trust Licence/ Capital Markets Services Licence issued by the Monetary Authority of Singapore (MAS)
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Real estate developer customers only
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- Company's track record of property-related development projects in the last 5 years
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Application requires a change/ extension of use
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- Completed change/extension of use checklist
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Usage requires NEWater/ Industrial water or potable water consumption exceeding 500 m3
a month
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- Completed Public Utilities Board (PUB) water requirement form
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Warehousing use only
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- Completed Land Transport Authority (LTA) land use proposal form
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Usage includes storage of petroleum or flammable material exceeding SCDF’s stipulated exemption quantities
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- Singapore Civil Defence Force (SCDF) approval
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Waterfront sites only
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- Completed Waterfront Land Lease Renewal form
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Jurong Island sites only
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- Completed National Authority (Chemical Weapons Convention) Singapore (NACWC) form for companies/ industries involving chemicals
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What are the Key Criteria for JTC Lease Renewal / Extension of Lease - Land Productivity?
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 2015 |
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 |
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Manufacturing Average |
1,715 |
Note: Above figures are tabulated based on JTC companies that are matched with EDB’s CMA 2015.
What is the Definition of JTC's R&D Expenditure for JTC Lease Renewal / Extension of Lease for JTC Property and Industrial Land)?
COST ELEMENTS CONSIDERED AS R&D EXPENDITURE
- Manpower cost – 100% for FULL-TIME R&D staff and 50% for staff in product design/development and process re-engineering.
- Costs of materials, specialised software and services consumed in R&D activities (must be directly related to project).
- Amortisation of Technology and Intellectual Property Rights Licensing/ Acquisition (only applies for licensing and acquisition with parties of no direct relationship, i.e. not parent or subsidiary/associate company).
- Training – 50% on training and course fees. (Training must be directly related to R&D and product design/development and process re-engineering.)
- Costs in engaging consultancy services and/ or conducting feasibility studies/ market research. These services/ researches must be directly related to R&D activities.
- Sub-contracting/outsourcing of R&D activities.
- Test marketing – the cost of producing prototypes for alpha and beta testing
- Certification, testing and type approvals.
What is the Definition of JTC Value-Added Terms for JTC Lease Renewal and Extension of Lease for Industrial Land?
DEFINITION OF VALUE ADD (VA) TERMS
Operating Income
- Sale/ Revenue - Refer to sales derived from goods manufactured or processed by the company only, excluding goods purchased for resale. The value of sales should be based on selling price excluding excise duties if any.
- Other Operating Income - Operating income the company derives other than those arising from the sale of manufactured goods.
- Total Operating Income - Sum of Sale/ Revenue and Other Operating Income
Operating Costs
- Raw Material, Components and Packaging (including subcontracted out) - Comprise direct input materials for the goods sold, both sourced from Singapore and imported, whether purchased by the company or by the outsourced company for work subcontracted out.
- Work Subcontracted Out (i) In Singapore (ii) Outside Singapore - Work subcontracted out comprises activities of the company's core business which are performed externally and excludes cost of raw material, components and packaging incurred on behalf of the company Expenses from work subcontracted out are considered to have been incurred in Singapore if activities were conducted within Singapore.
- Remuneration - Remuneration should pertain only to employees working in Singapore (those employed pertaining to the project). It should exclude those who are on the payroll of the Singapore entity and work outside Singapore, especially in the case of HQ projects, and should take in every component provided for in compensation package which is paid annually, including benefits. Locals refer to Singaporeans and Permanent Residents.
- Depreciation - Depreciation refers to that for capital assets located in Singapore only.
- Rental - Clear distinction should be made between rental arising from the use of building space and that for land.
- Interest Cost - Interest Cost refers to interest payable to local banks, branches of foreign bank and other corporations.
- Royalties & Know-how Fees (i) In Singapore (ii) Outside Singapore - Payment which is recurring for ongoing use of intellectual property and transfer of know-how. Does not include one-off lump sum payments made in the event of the acquisition of intellectual property.
- Other Operating Costs (i) In Singapore (ii) Outside Singapore - Examples include freight charges and advertising and promotion costs. Please provide a breakdown in terms of expenses incurred and activities carried out within Singapore or outside Singapore.
What is Plants and Machinery Investment for JTC Lease Renewal / Extension of Lease for JTC Property and Industrial Land)?
What can be considered as P&M investments by JTC?
P&M investments are capital expenditure on items used in your operations such as :
- Air-conditioning for industrial machinery
- Building and construction equipment (including rollers, mixers, piling equipment and drilling plants, loaders, dumpers, excavators, bulldozers and support structure)
- Chimney if it forms part of the machinery
- Computer systems and equipment that are required/linked to the production process
- Container trailers and containers, trucks, goods vehicle, earth moving plant/excavators and other plants that are used in relation to production.
- Dry Dock and Floating Dock
- Utility plant and boiler
- Electronic equipment (including assets such as electronic detection, guidance, control, radiation, computation, test and navigation)
- Fire Safety Device for industrial machinery
- Furnace / Kiln / Silos
- Manufacturing and industrial processing plant and equipment
- Material handling equipment such as cargo lifts, weighing machines, conveyor belt, forklifts, and cranes
- Dock leveller system
- Warehouse racking system (for warehouse lessees)
- Oil / Chemical Tank / Refinery Plant
- Overhead cranes/ gantry cranes
- Special portable equipment e.g. Measuring and testing equipment of a similar nature
- Tanks fixed to the ground
- Treatment Plant
What is NOT considered as P&M investments by JTC?
- Motor vehicles such as saloon cars, scooter, motorcycles, etc
- Office Furniture and Furnishing
- Word Processor, computers, printers, scanners, fax machines, photocopying machines and other related products used for administrative work
- Air conditioning for office use Materials for production
In case of doubt as to whether any equipment can be considered as part of plant and machinery, the yardstick is that it should be used directly in the production process in connection with the company’s approved usage.
What value of P&M to take by JTC
- Plants and Machinery purchased during the Building / Investment Period will be taken at cost.
- Plants and Machinery which you relocate from another factory premises or which you purchase before the Building / Investment Period can be included based on net book value as at the date of commencement of the Building / Investment period.
- The initial cost to put the plant and machinery to working condition for its intended use such as delivery and installation costs can be included as part of the investment.
What is the Current JTC's Subletting Policy for JTC Factory and Industrial Land?
What is 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).
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