Guidelines for Renewal of Lease

• Remaining lease term
  
  To be eligible for lease renewal, the balance of your existing lease term should not exceed 15 years. Applying early for a lease renewal will help you plan your investments and provide sufficient time period to recover the costs of your capital expenditure.

• Redevelopment plans
  
  If your site is affected by redevelopment plans, you might not be able to renew your lease. Please contact your Service Officer to discuss this matter before proceeding with your application.

• Proposed Usage

Industrial Leases

Your proposed usage is mainly for industrial activities and not for offices, showrooms, storage and warehousing that is unrelated to industrial use.

Industrial activities include: manufacturing production assembly servicing fabricating research & development

Non-industrial activities include: commercial office usage retail trading wholesale

Warehousing leases

Your proposed usage is mainly for storage and distribution of goods as stated in the usage clause of the lease and not for the purpose of offices, showrooms, and storage and distribution of goods unrelated to the usage clause.

You must ensure that the type of goods stored in your warehouse are according to the usage clause in your lease regardless of whether the goods belong to you or your customers. If you intend to store any additional goods not stated in the usage clause, you must seek JTC's approval for the extension of use.

• Minimum Gross Plot Ratio
  
  You are required to meet the minimum gross plot ratio for the proposed lease renewal.  As you are encouraged to optimise your land use, if your existing gross plot ratio is below the minimum required gross plot ratio, you would be required to intensify your land use by increasing the floor area. Please see plot ratio criteria calculation for more details.

• Building and Civil Works and Refurbishment
  
  In the event that your lease renewal application is approved, it will be subject to the approval of the building plans for your proposed site development.
  
  Please note that your site development should be based on the 'Aesthetic Control Guidelines for Building & Civil Works' for prime or normal sites.
  
  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.

• Investment in Plant & Machinery (P&M)
  
  Investments in new P&M are required when you renew your lease to ensure that your land would continue to be used productively. Your proposed investment on P&M, including both new and existing investments (taken as the net book value at the commencement of the investment period) should be able to support your proposed business plan for the renewed term.
  
  A list of items that are considered as P&M is found in Annex 1 of the Lease Renewal Handbook.
  
  You will be required to illustrate how your proposed P&M investments can assist you in achieving your value add projections and also to provide information on the proposed and existing P&M (Please refer to Annex 2 of the Lease Renewal Handbook for an example of the required flowchart).

• URA’s Space Utilisation Rule
  
  Industrial leases
  Your proposed plans must meet the Urban Redevelopment Authority's 60:40 space utilisation rule as follows:
  
  At least 60% of your total gross floor area shall be used for industrial activities (manufacturing, assembly, research and development purposes, including ancillary storage and warehousing related to the industrial activity only).
  
  The remaining 40% of your total gross floor area may be used as ancillary offices, showrooms, neutral areas or communal facilities and such other uses approved in writing by JTC and the relevant governmental and statutory authorities.

Warehousing Leases
Your proposed plans must meet the Urban Redevelopment Authority’s 60:40 space utilisation rule as follows:

At least 60% of your total gross floor area shall be used for warehousing activities

The remaining 40% of your total gross floor area may be used as ancillary offices, showrooms, production, neutral areas or communal facilities and such other uses approved in writing by JTC and the relevant governmental and statutory authorities.

• Maximising land use
  
  You are encouraged to make better use of your existing site(s) and factory space in the new lease term.
  
  In the event that you are unable to maximise your land use, you are encouraged to return part of your land to JTC. As a guide, the portion of land to be returned should be regular in configuration, be capable of independent re-development and have a land area of at least 5,000 sq m.

• Breach of lease covenant
  
  You should not be in breach of any terms and conditions 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.

• Other Important Points
  
  You need to ensure that you have good productivity in your existing and future use of your land, floor space and labour.
  
  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.
  
  Fulfilment of all the criteria does not necessarily constitute a consent from JTC for a lease renewal. In assessing your application, JTC is required to ensure that your premises would be put to the best possible use by renewing your lease and that you would be able to maximise your productivity in the extended lease term.