JTC Assignment of Lease

A: 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 the 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 the lease of property to a related or joint-venture company where there is a shareholding relationship between the assignor or transferor company and the assignee or transferee company

• Inclusion or withdrawal of partners within a firm (Applicable for sole-proprietorship or partnership only)

• Conversion of legal entities from sole-proprietorship or partnership to a 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.

A: Generally, you may assign your land lease, if:

• Your lease is not within the Assignment Prohibition Period - The Assignment Prohibition Period is the duration in which you are not allowed to re-assign your lease after the last assignment. The Assignment Prohibition Period is 5 years if your remaining lease is 30 years and less; or 10 years if your remaining lease is more than 30 years

• Your remaining lease term is more than 5 years

• You have made a written offer to JTC first if your Lease Agreement contains the Right of First Refusal clause

To ensure that the Assignee puts the scarce land resource to the most optimal and productive use, the application for assignment of lease is subject to an assessment of the Assignee’s business plan which will be evaluated based on the value-add to the economy and creation of good jobs. There may be other reasons when the assignment is disallowed. Please contact JTC for a pre-consultation.

A: Prospects who are interested in applying for a new JTC facility or existing customers who are keen to take up another JTC facility may wish to note that applications are assessed based on several criteria, including but not limited to the following:

• Value-Added - Value-added (VA) refers to the value “added” by a company to raw materials used during a production process. It is the difference between total output and the total operating cost incurred in the production of goods and services or ancillary activities, where total operating cost refers to the sum of total materials and operating cost. In addition, JTC will give due consideration to other factors, including but not limited to the credibility of the applicant's business proposal.

• Plant & Machinery - Plant & machinery (P&M), which refers to fixed assets as defined in a company's audited statement of accounts and used in the production of goods and services in connection with the company's business. Companies applying for JTC's land or space will have to declare their overall investment figures and provide justification for the declared figure.

• Building & Civil (B&C) - Building & Civil (B&C) works. A company is also required to meet the minimum B&C works guidelines. This comprises of a set of qualitative design guidelines and standards. Companies applying for JTC's land and facilities will have to provide a set of cost figures indicating the expected building standard.

A: Following approval, businesses must rectify any breaches before the transfer can be legally completed. If the transferee’s business activities involve pollutive materials, an Environmental Baseline Study may need to be conducted. Furthermore, the transferee’s rent will be revised to the prevailing posted rate after the transfer of lease, unless the lease is being transferred due to corporate restructuring. If you are on a land premium payment scheme, an assignment levy may apply.

A: Yes, JTC lessees are required to inform the incoming lessee of the solar deployment that the outgoing lessee had undertaken. If there is no existing solar deployment, the incoming lessee will be required to undertake Mandatory Solar Deployment if the site has 800 sqm of available contiguous rooftop area and 15 years or more of the remaining lease term.

A: The information listed below will be used only as a reference. All applications are subject to final approval by JTC at JTC's discretion (including any terms and conditions that JTC may impose at its discretion 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 are 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 dormitories.

• 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.

A: The following application types will require additional forms/ documents to be submitted for further assessment:  

• Assignee's/ transferee's (Buyer's) updated company profile from ACRA 

• NEA’s (DCLD) advisory on Buyer’s usage for Industrial Allocation 

• For Land and Standard Factory customers: A copy of the Buyer's latest annual report or audited accounts and a full business plan with details of your Buyer's products/services to support the application 

• For Trusts and Investment Fund Buyers: A copy of the Trust Business Licence/ Capital Markets Services Licence issued by MAS 

• For Real Estate Developer Buyers: Buyer's track record of property-related development projects in the last 5 years 

• If proposed usage includes Warehousing: Completed LTA Land Use Proposal Form. 

• If proposed usage includes storage of petroleum/ flammable material exceeding SCDF's stipulated exemption quantities: SCDF approval is needed for storage of petroleum/ flammable material 

• For Waterfront sites: Application form for use of waterfront site.

• For Jurong Island sites: Completed NACWC Form for companies/ industries involving chemicals

A: 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 3 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.

A: 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 minimum assignment prohibition periods are as follows:

New Lessees and Lessees with Approved Lease Renewals (lease tenures of up to 30 years)

• During the investment period and 5 years thereafter

• Lessees with Renewed Tenure - During the investment period and 5 years thereafter, or 3 years from the 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 the date of legal completion of an assignment

• Leases with > 30 Years Remaining - 10 years from the date of legal completion of an assignment

• All Lessees - Leases with < 5 years remaining

A: It is the lessee's responsibility to ensure that the Company 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 lease transfer, JTC finds any breach that 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 the assignment/ transfer is completed. However, once the assignment or lease is completed, JTC will look to the assignee or transferee (Buyer) to remedy all breaches that have yet to be rectified or are discovered after the completion of the assignment/transfer.

A: 

From the Assignor/Transfer or (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);

• Assignment of levy# (if applicable);

• 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);

• Such other documents as specified in JTC's consent letter

• All sums due to JTC are subject to prevailing GST.

From the Assignee/ Transferee (Buyer):

• Letter of acceptance of the terms and conditions in JTC's consent letter;

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

• Duly completed GIRO authorization form;

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

• Certificate of incorporation or other document of registration issued by ACRA;

• Letter of undertaking from assignee/ transferee (applicable for inclusion or withdrawal of partners or conversion to Pte Ltd company);

• Signed Variation of Lease/ Supplementary Agreement together with payment of the fee for such document as set out in JTC's consent letter.

A: In land-scarce Singapore, constant rejuvenation of land use is essential to optimise land use. To facilitate overall land use planning and developmental needs, JTC will impose a 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, the ROFR clause will be included in the lease for new allocation, lease renewal and lease assignment cases.

A: 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.

A: 

• 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 was passed in Parliament in September.

• This will enable JTC to match companies' space needs better across different stages of growth with a larger supply of industrial land and space and allow the government to undertake more comprehensive master-planning of industrial estates.

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

The information listed above is to be used as a reference resource for your personal consumption only. It is not intended to be and does not constitute financial advice, investment advice or any other advice, 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). 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.

• Statistics on Historical Data of JTC Industrial Land Sold from 2017 to 2024

• Statistics on Historical Data of JTC Industrial Land Sold from 2014 to 2016

• Statistics on JTC Prepared Industrial Land - Updated 4th Quarter 2023

• Statistics on JTC Ready-Built Facilities (Land Based) - Updated 4th Quarter 2023

• Statistics on JTC Industrial Property – Quarterly Market Report - 1st Quarter 2017 to 4th Quarter 2023

• Statistics on JTC Land Rent for JTC's Standard Factory and Purpose-built Factory - Updated 1st January 2024

• Historical Data of Industrial Properties Caveats Lodged from 2022 to 2024

• Historical Data of Industrial Properties Caveats Lodged from 2020 to 2021

• Historical Data of Industrial Properties Caveats Lodged from 2018 to 2019

• Historical Data of Industrial Properties Caveats Lodged from 2016 to 2017

• Historical Data of Industrial Properties Caveats Lodged from 2010 to 2015

• Historical Data of Industrial Properties Caveats Lodged from 2000 to 2009

Our key services include:

• JTC Assignment of Lease Application: We assist Clients in preparing successful proposals and business plans for obtaining approval for the JTC Lease Assignment or purchase of JTC property and industrial land.

• JTC Standard Factories Launch: We provide guidance on preparing successful proposals and business plans for obtaining approval for successfully purchasing directly from JTC for Standard Factories Launch and Tender Application.

• JTC New Industrial Land Application / Tender / Industrial Government Land Sales Programme (IGLS): Our team specializes in preparing, analyzing, and tendering for JTC Industrial Land.

• JTC Lease Renewal / Extension of Lease: We support clients in preparing successful proposals and business plans to obtain approval for applying for JTC Lease Renewal and Extension of the Lease.

• JTC Third-Party Build and Lease Scheme: We help clients successfully apply for JTC Third-Party Build and Lease Scheme.

• JTC Anchor Tenant Application: Our expertise enables clients to successfully apply for approval as JTC Anchor Tenant for industrial properties.

• JTC Concept and Price Tender: We guide clients in successfully applying for JTC factory under the Concept and Price Tender (CPT).

• Construction of JTC Factory / Industrial Developments Services: We provide consultation on Facilities Optimization and Construction of JTC factory.

• JTC Industrial Property – Market Research Reports: We offer up-to-date statistics on historical data of JTC industrial land sold, Prepared Industrial Land, Ready-Built Facilities (land-based), Quarterly Market Reports, JTC Land Rent for JTC's standard factory and purpose-built factory, and historical data of JTC properties caveats lodged from 2000 to 2024.

• Singapore Economic Outlook 2024: Quarterly Report on Singapore Economic Performance. Next Update 3rd week of May 2024.