JTC Corporation - JTC TURNS IN AN OUTSTANDING PERFORMANCE IN FY2006

JTC turns in an outstanding performance in FY2006 with positive allocations for land and ready-built facilities

Key focus is to create a dynamic industrial landscape in Singapore

Singapore, 19 July 2007: JTC Corporation (JTC) registered an outstanding performance in FY2006 as an improved economy pushed occupancy rates up for its industrial facilities. According to JTC’s Annual Report FY2006, net allocation of prepared industrial land reached 239 hectares. This was the second highest level in the past 10 years, following the peak in FY2005 at 268 hectares. Net allocation of ready-built facilities also registered positive growth of 93,500 sq m. This pushed occupancy rate up from 84% to 88%, the highest level in the last five years for ready-built facilities.

2 JTC recorded a total surplus of $609 million in FY2006. This is a 61 per cent growth over the previous year’s performance. The improved performance was mainly due to a buoyant property market which resulted in a significant drop in provision for impairment losses during the year. The Corporation’s operating income increased slightly by 1% to $1,109 million in FY2006. JTC’s expenditure went down by 29% to $509 million due to lower impairment losses on properties. In line with its developmental role, JTC invested a total of $722 million in capital expenditure for development projects in one-north and Jurong Island. This was 20% higher than the amount spent in FY2005.

3 JTC’s Chief Executive Officer, Mrs Ow Foong Pheng said, “Looking ahead, there is a need for us to prime ourselves to take on new strategic projects that will propel us into new growth areas in an increasingly competitive environment. That is why we undertook a major organisational review to redefine our mission and functions. Our new vision is to create a dynamic industrial landscape, and make Singapore the choice investment location for local and foreign industrialists.”

4 Mrs Ow outlined five key strategic thrusts that JTC will be focusing on over the next few years to help create a dynamic industrial landscape in Singapore and secure new high-value manufacturing investment projects for Singapore. They are to:

a. optimise our scarce land resource to meet the needs of industries,

b. promote a competitive industrial landscape,

c. further enhance our real estate solutions and service standards,

d. scale up innovation for growth and competitiveness and

e. pursue organisation excellence.

Changing The Face of Our Industrial Property Market

5 JTC will explore new ways to optimise land use and encourage industrialists to do likewise. It will explore new innovative factory designs that use smaller land plots but are built to higher plot ratios. It will also continue to rejuvenate old industrial estates and redevelop them as part of its long-term plan to optimise land use. For example, the 110-hectare Tanjong Kling site in Jurong Industrial Estate will be redeveloped into a focal point for high value-added manufacturing activities and as a base for promising local enterprises to grow their businesses. Planning is now underway to improve the infrastructure to support high-tech manufacturing activities. Similarly, JTC’s vision of an integrated modern Furniture Hub at Sungei Kadut is taking shape steadily. Site preparation work has commenced on two vacated sites totalling 1.6 hectares which will be allocated to new furniture companies.

6 Mrs Ow said, “We will continue with the long-term strategy of investing in industrial land and infrastructure development to help secure new high value-added manufacturing investment projects. Some of the key industrial infrastructure projects that were launched by JTC will position Singapore well in hosting high-growth industries. They include the master-planning and development of a new aerospace park at Seletar to support aerospace maintenance, repair and overhaul services, and the construction of a new science and engineering complex at Fusionopolis Phase 2A.”

Increasing Competition, Celebrating Diversity

7 JTC also kept up the pace of its efforts to award more development projects to the private sector under its second strategic thrust to encourage greater competition in the industrial property market for a dynamic industrial landscape. Twelve projects worth $270 million were handed out to the private sector in FY2006. Some of the projects included the award of Government Land Sales sites at Serangoon North Avenue 4, Ubi Avenue 4 and Changi North Street 1.

8 Mrs Ow added, “JTC will continue to help encourage growth both in depth and breadth of the private industrial property sector in the current financial year. We will continue to allocate more sites for private sector development. We will be launching a Request for Proposal to invite private developers to develop Phase 3 of Biopolis very soon. Phase 3 of Biopolis will cover a site of 9,400 sq m for the development two multi-tenanted buildings with a maximum gross floor area of 42,000 sq m. It will be targeted at mainly private research institutes and incubator research activities in the area of translational and clinical research, as well as medical technology.”

9 On divestment, Mrs Ow reiterated that JTC’s divestment programme is progressing according to plan. It is appointing a REIT manager to help it divest its portfolio of properties. Some 1.7 million sq m of its high-rise ready-built industrial property portfolio will be divested via a combination of a Real Estate Investment Trust (REIT) and trade sale. Mrs Ow said that JTC has chosen this divestment route to maintain the competitiveness of the industrial property market following divestment. It is also part of JTC’s plan to exit the development of ready-built industrial facilities in market segments where there is active private sector participation. In addition, JTC has recently sold off its three workers’ dormitories to a private sector operator. The sale was part of its effort to divest its interest in non-core assets.

Delivering Superior Solutions

10 JTC’s third strategic thrust is to step up the quality of its industrial spaces and supporting infrastructure. The Corporation will continue to raise service standards, collaborate with other government agencies to provide seamless solutions to make it easy for investors to locate their businesses in Singapore, and to thrive here. JTC will have to go beyond merely meeting customers’ needs and must challenge itself to constantly anticipate their needs and exceed their expectations. Among other things, the Corporation is exploring the feasibility of rolling out new mobile services to help its customers.

Promoting Innovation and Creativity

11 Mrs Ow said, “In land-scarce Singapore, we will have to continually challenge the status quo and introduce innovative new space solutions that will drive growth and add depth to the industrial property market.” During the year, JTC launched a number of pioneering industrial property products that increase land productivity and cater to niche business needs. One such project is Jurong Rock Cavern − Singapore’s first underground oil storage cavern at Jurong Island which caters specifically to the petroleum and petrochemicals industries. Under Phase 1, 1.47 million cubic metres of underground space will be constructed for the storage of crude oil, condensate, naphtha and gas oil. The project will free up surface land on Jurong Island for higher value manufacturing operations.

12 Mrs Ow elaborated, “In future, we will put more resources into R&D projects to explore new designs for factory facilities and floating structures. We will also press on with our quest to maximise the use of underground space in Singapore.”

Pursuing Organisational Excellence

13 JTC’s fifth strategic thrust is to continue to develop and strengthen the capability of its people, management systems, and processes. Among other things, JTC will review the career development framework and look at how we can equip our staff with relevant skills and competencies for the new challenges ahead. It will also review its business processes and policies to ensure that they are pro-enterprise and customer-friendly in every aspect of its operations. The Corporation will continue to leverage on information technology to further enhance our services to customers.

About JTC Corporation

JTC Corporation (JTC) is the lead agency in Singapore to develop key industrial facilities and create a dynamic industrial landscape, in support of the nation's economic development. Currently, the Corporation has under its management many developments including four wafer fab parks and an advanced display park, two business parks, a chemicals hub at Jurong Island, biomedical parks in Tuas as well as logistics hubs for aerospace, chemical and general warehousing industries.

JTC also plays a catalytic role in sourcing and introducing leading edge real estate solutions – such as specialised research facilities and underground caverns – to anchor important activities critical to the growth of the economy. It is the master developer for one-north at Buona Vista – a 200-hectare development for research & development and entrepreneurial activities. With a focus on knowledge-intensive activities in the biomedical, infocomm and media industries, one-north will be a niche environment for innovation incorporating research laboratories, offices, homes, parks and educational institutions. JTC's home page address is http://www.jtc.gov.sg.

Annex A

Key highlights of JTC's projects in FY2007

1 Work in progress on underground cavern at Jurong Island

·Construction work in progress at Jurong Island for Phase 1 of the Jurong Rock Cavern (JRC) – Singapore’s first underground rock cavern for hydrocarbon storage. It will have a capacity of 1.47 million cubic metres of underground storage space under the Banyan Basin, Jurong Island.
Phase 2 of JRC, which could potentially yield another 1.3 million cubic metres of oil storage space, is currently under consideration.

2 Master-planning of Seletar Aero+sPace completed in June 07

Master-planning work on the Seletar Aero+sPace (SAP) has been completed. Site work will begin from the second half of 2007.
Some 140 hectares of land surrounding the Seletar Airport will be developed into an aerospace park. Seletar Airport will be upgraded with instrument landing systems and runway extensions so as to be on par with its regional counterparts.
The aerospace park will support a new integrated aerospace industry cluster incorporating aerospace MRO; design and manufacturing of aircraft systems and components; business and general aviation activities; and an aviation campus for the training of pilots, aviation professionals and technical personnel.

3 Phase 1 of Fusionopolis to be ready by early 2008

Phase 1 of Fusionopolis is scheduled for completion by early 2008.
The development is made up of two towers connected by sky-bridges and comes with fully-integrated service apartments, amenity clubhouse, media studios, satellite access and retail outlets to meet the needs of the infocomm and media industries. It features a silver balloon-shaped performance theatre at the base of the towers.
Fusionopolis Phase 2A is currently under construction at a 1.3-hectare site. It will feature dry and wet laboratories, clean room facilities and ground-floor retail units.