Assignment Prohibition Period for Lessees
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 assignment prohibition periods are as follows:
||Assignment Prohibition Period (i.e. duration in which Lessee is not allowed to assign)
New Lessees and Lessees with Approved Lease Renewals (lease tenures of up to 30 years)
- During investment period and 5 years thereafter
Lessees with Renewed Tenure
- During investment period and 5 years thereafter, or 3 years from 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 date of legal completion of assignment
Leases with > 30 Years Remaining
- 10 years from date of legal completion of assignment
||Leases with < 5 years remaining
The lessee may assign to a third party facility provider after the assignment
prohibition period provided that it leases back at least 70% of the gross floor
For more information on Third Party Facility Assignment of Lease, please refer to
Right of First Refusal (ROFR) upon subsequent assignment/ transfer of lease
A ROFR clause will be imposed on the Buyer upon JTC's consent to the assignment/
transfer of lease.
How does the ROFR work?
A lessee (Buyer) with the ROFR clause in the contract who intends to assign/ transfer
the lease, is required to notify JTC and to make a written offer to JTC. The offer
price should come with a valid valuation report. JTC will make an assessment and
decide whether 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/ transfer the premise will have to go
through the process of notifying and making a written offer to JTC.
Please refer to the Schedule of Administrative Fees.
All property tax, outstanding rent (subject to prevailing GST) and interest accrued
therein and all other outstanding charges plus GST must be settled before completion
of assignment/ transfer of lease. The Seller's solicitor will have to provide
a letter of undertaking that they will deduct and pay to JTC direct from the proceeds
of sale such sums plus GST owing to JTC upon completion.
Rent may be revised upon assignment/ transfer of lease. The shareholding relationship
between the assignor/ transferor (Seller) and the assignee/ transferee (Buyer) will
be considered in the calculation of the revised rent.
Payment of Land Rent
The Seller shall continue paying the annual Land Rent and any revisions thereto
until the date of completion of the assignment/ transfer of lease. JTC will continue
to bill the Seller until and including the month of completion of the assignment/
transfer of lease. The Seller or Seller's solicitor shall notify JTC of the
completion date of the assignment/transfer immediately upon such completion to enable
JTC to bill the assignee with effect from the first of the month following the month
of completion of the assignment/transfer of lease. The Seller's solicitor shall
make the necessary adjustments with the Buyer or the Buyer's solicitor as regards
the payment of the Land Rent billed by JTC before, on or after completion of the
assignment/ transfer of lease.
General illustration only:
The consent to assign letter is dated 5 January 2011 and the Seller's solicitor
notifies JTC immediately upon the completion of the assignment/ transfer of lease
on 15 March 2011. Billing will be addressed to the Buyer with effect from 1 April
2011 (ie, the first of the month following JTC's receipt of the notification
of the completion date of the Assignment).
Time Line for Completion
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 6 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.
Both Seller and proposed Buyer are required to submit to JTC a copy of their resolutions
for the sale of the property. JTC will provide a standard format for the buyer's
resolution. Resolutions are only required in the case of private limited companies.
Rectification of Breaches
It is the lessee's responsibility to ensure that the does not breach any of the
lease terms, covenants or conditions, and observes and performs all his obligations.
For more information, please refer to the List of common breaches (14KB).
he 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 transfer of lease, JTC finds any breach which 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 completion of the assignment/
transfer. But once completion of the assignment or transfer of lease takes place,
JTC will look to the assignee or transferee (Buyer) to remedy all breaches which
have either yet to be rectified or are discovered after completion of assignment/
All ancillary facilities (eg cooling tower, condenser unit, store room) tied to
the industrial unit and serving that industrial unit will also be assigned/ transferred.
Any wayleave on the property given by the Seller will be terminated upon assignment/
transfer of lease. Please inform JTC should the Buyer wish to retain the wayleave.
The necessary reinstatement works relating to the termination of the wayleave must
be completed before completion of assignment/ transfer lease.
Deed of Assignment or Instrument of Transfer
JTC no longer requires the submission of assignment/ transfer document to JTC for
vetting and approval. Instead, Seller's solicitor must obtain written confirmation
from JTC (PRIOR to the execution of the Deed of Assignment or the execution
and registration of the Transfer Instrument) that JTC has no objections to
the signing of the Deed of Assignment or the execution and registration of the Transfer
The Seller's solicitors shall notify JTC of the date of completion assignment
or transfer immediately upon such completion. A copy of the duly signed Deed of
Assignment or duly executed, stamped and registered Transfer Instrument should be
given to JTC within 14 days from the date of legal completion of assignment/ transfer.
For info pertaining to third party facility providers, please click here.