Policies for Third-Party Facility Providers

Objectives for formulating policies for third-party facility providers:

  • Optimise land resource throughout the tenure of the lease;
  • Ensure that JTC land and facilities cater to industrialists who are carrying out bona-fide operations at the premises;
  • Facilitate industrialists to offload assets to lighten balance sheet.
Modes of Participation
Modes of Participation

To facilitate private sector participation in the industrial market, JTC allows third-party facility providers to be our lessees if they engage in "Third-Party Build and Lease" (Third-Party B&L) or "Sale and Leaseback" (S&LB) scheme.

The Third-Party B&L scheme enables key and strategic industrialists to appoint a qualifying third-party facility provider to undertake the development of a customised facility according to the industrialist's specifications. In return, the industrialist undertakes to lease the facility from the third-party facility provider under a set of negotiated terms and conditions agreed between them. The Third-Party B&L scheme provides companies the option of operating in customised facilities without having to pay the development costs upfront.

Under the S&LB scheme, the industrialist assigns the completed facility to the third party facility provider, who in turn leases back the facility to the industrialist for continual usage.

The intention of both Third-Party B&L and S&LB scheme is to help facilitate industrialists to offload assets to lighten their balance sheets.

Allowable Third-Party Facility Providers
Allowable Third-Party Facility Providers

JTC allows the following list of third-party facility providers to participate in Third-Party Build & Lease and Sales & Leaseback:

  • Trusts/ Investment Funds that are holders of Business Trust Licence/ Capital Markets Services Licence issued by MAS (see MAS legislation guidelines);
  • Developers who have an established and credible track record of having been involved in the business of developing property-related projects in the last 5 years; and
  • Industry Association/ Consortium Sponsored Vehicles that are supported by economic agencies e.g. EDB and SPRING

Assignment Of Lease
Assignment of Lease

Assignment or 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.

With effect from 15 November 2013, the Assignment of Lease policy has been revised to better respond to recent trends in the industrial land market. For enquiries, please contact your Customer Engagement Officer or our Contact Centre at 1800-5687000.

Assignment Prohibition Period for Third-Party Facility Providers (w.e.f. 15 November 2013)

Assignment Prohibition Period
(i.e. duration in which Lessee is not allowed to assign)
Third-party facility provider lessees in new third-party build-and-lease contracts During investment period and 5 years thereafter
Third-party facility providers who have purchased JTC facilities from the secondary market (i.e. new assignment contracts)

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 third-party facility provider lessees Leases with < 5 years remaining

Minimum Occupation Period (revised w.e.f. 15 November 2013) and Gross Floor Area for Anchor Tenants

Minimum Occupation Period
(i.e. duration in which anchor tenant is required to operate on the premises)
Minimum Gross Floor Area (GFA)
(i.e. space which anchor tenants are required to occupy)
Anchor tenants in new third-party build-and-lease programme During the investment period and 5 years thereafter Collectively, to occupy at least 50% GFA within 5 years from obtaining the first TOP, and at least 70% thereafter, and each to occupy minimally 1,000 sqm
Anchor tenants 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

Collectively, to occupy at least 70% GFA and each to occupy minimally 1,000 sqm

The original anchor subtenant is required to occupy minimum 50% of GFA within 5 years from the first TOP for the site and minimum 70% thereafter.

Remaining GFA can be sublet to other industrialists (i.e. normal subtenant), subject to usage and compatibility.

In the event that the original anchor tenant pre-terminates, the third-party facility provider is required to get replacement anchor tenant(s) approved by JTC to fulfil the remaining minimum occupation period.

Should the original anchor tenant leave after fulfilling the minimum occupation period, the third-party facility provider is required to ensure that the minimum 70% GFA is occupied by other approved anchor tenant(s) at all times. Multiple anchor tenants are allowed to jointly fulfil the minimum 70% GFA requirement and each is to occupy at least 1,000 sqm.

Approved anchor tenant of a Third-Party Facility Provider is defined as a company that satisfies JTC’s assessment of value-added, remuneration per worker and skilled worker profile, as well as the minimum GFA requirement.

Mode of Payment

With effect from 1 January 2013, the payment scheme for new assignment contracts involving third-party facility providers has been revised to upfront land premium.

Fees and Charges

Please refer to the Schedule of Administrative Fees.

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).

Notwithstanding any of the foregoing, JTC shall have the sole and exclusive right to receive, process and approve all applications according to such qualifying criteria as it deems fit and may at its discretion, reject any application or terminate your use of the website services as appropriate.

We retain the right, at our discretion, to modify, delete, edit or withdraw any part, component or all of the online request facilities at any time, or stop, restrict or suspend the same in relation to you or any other user(s) without being liable for any costs, expenses, losses and/or damages incurred by you or any other user(s) whatsoever.

Subletting
Latest Policy Review (with effect from 1 October 2015)

As part of JTC’s regular policy review to address changing business needs and operating environment, we have revised our policies for Third Party Facility Providers (3PFPs), where land has been leased through Third-Party Build & Lease (B&L) or Sale & Lease-Back (S&LB) schemes. We would like to inform you of the following changes that will take effect on 1 Oct 2015.

Reduced Gross Floor Area (GFA) Requirement by Anchor Subtenants

Under 3PFP’s policy, approved anchor subtenants must collectively occupy a minimum quantum of space and each anchor subtenant must take up at least 1,500 sqm of space. We have received feedback that many quality anchor subtenants require smaller spaces than the minimum space quantum specified in the policy. In our review, we had to balance the need to ensure the provision of large spaces for quality industrialists with this feedback. To allow more quality industrialists to qualify as anchor subtenants, we will reduce the required minimum GFA to 1,000 sqm.

Anchor Subtenants Which Remain status quo at Renewal Need Not be Reassessed

Currently, anchor subtenants need to apply for subletting renewals and applications are assessed based on their economic contributions, productivity of the project and creation of good jobs. To improve administrative efficiency, the reassessment of existing anchor subtenants at renewals will now be required only when there is a change (i.e. an increase or decrease) in their occupied GFA and/or usage. Please note that applications will still have to be submitted for extensions of subletting period.

Minimum Occupation Period of Anchor Subtenant upon Renewal

A minimum occupation period (MOP) of three years per term is currently imposed on subsequent anchor subtenants, i.e. replacement of the original anchor subtenants. To allow greater flexibility for these anchor subtenants, we will now consider the overall duration the anchor subtenants have been on site. As such, during their renewals, subject to our approval, they can now renew for any duration (depending on their business needs) after they have fulfilled their initial MOP. Similarly, this flexibility will also be extended to original anchor subtenants for their renewals after they have fulfilled their MOP.

Subletting

For additional information on the Revised Subletting Policy (with effect from 1 October 2014), please refer to the FAQs here (file size: 177KB).

Subletting takes place when the lessee of a JTC land or facility rents a portion of his building space to another party - including related companies or one that he wholly owns.

Sublet Quantum

JTC allows third-party facility providers of new contracts involving B&L and S&LB to sublet 100% of the total Gross Floor Area (GFA) subject to:

  • Minimum 50% within 5 years from obtaining the first TOP for the site, and minimum 70% thereafter, to be occupied by approved anchor tenant(s) at all times.
    • Approved anchor tenant of a Third-Party Facility Provider is defined as a company that satisfies JTC’s assessment of value-added, remuneration per worker and skilled worker profile, as well as the minimum GFA requirement.
    • The original anchor subtenant is required to occupy minimum 50% of GFA within 5 years from the first TOP for the site and minimum 70% thereafter. After the original anchor tenant has fulfilled the minimum occupation period, multiple anchor tenants are allowed to jointly fulfil the minimum 50% (or 70%) GFA requirement, and each is to occupy at least 1,000 sqm.
  • Remaining GFA can be sublet to other industrialists, subject to usage and compatibility.
Fees and Charges

Administrative Fee

Please refer to the Schedule of Administrative Fees.

Subletting Fee

Subletting fee (plus GST at prevailing rate) is payable monthly in advance. However, if your monthly subletting fee falls below $41.67, you shall pay the subletting fee on an annual basis.

For more information on JTC's policy on subletting, please click here.

Right of First Refusal (ROFR) Assignment
Right of First Refusal (ROFR) upon Assignment

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.