Developers and property agents must not mislead buyers into mis-using industrial land for unauthorised commercial or office activities.
In fact, they are required to inform prospective buyers upfront that industrial units can only be used for industrial activities.
In a blog post on Friday, National Development Minister Khaw Boon Wan said some appear to be abusing the lower rentals at industrial premises for commercial or office activities.
He said that’s wrong as offices should be located at commercial sites.
Some non-industrial activities, such as child-care centres, staff canteens and showrooms, are allowed within industrial developments as they provide supportive services and do not occupy more than 40 per cent of the industrial development together with lift lobbies and other circulation areas.
Mr Khaw stressed that bona fide industrial activities will need space, and shoe-box factory units cannot accommodate genuine industrial activities.
Legitimate industrial activities include manufacturing, warehousing and production as well as certain types of e-businesses such as IT infrastructure and software development.
A shoe-box factory unit can span 50 to 80 square metres, no bigger than a typical convenience store such as a 7-Eleven shop.
According to industrial landlord JTC, a minimum unit size of 150 square metres is necessary for genuine industrial activities.
Mr Khaw said this information has been spelt out clearly in industrial land sale tenders and the evaluation of development proposals in industrial parks.
Responding to Channel NewsAsia’s query, the Urban Redevelopment Authority said it will require developers of industrial properties to issue a side-letter to all buyers upfront at Option-to-Purchase stage.
The letter will spell out clearly that industrial premises are specifically for industrial use like production, manufacturing, factory and/or warehouse activities and are not be converted to other uses.
URA added that it is currently working closely with the Council for Estate Agencies (CEA) to ensure that estate agents and salespersons provide accurate information to potential buyers and tenants on the uses that can be allowed in industrial properties.
URA said it has conducted a seminar to educate real estate agents on URA’s land use guidelines.
Source : Channel NewsAsia – 16 Mar 2012