No significant market impact or policy changes are expected from the announced transfer of industrial units and industrial land leases from the Housing & Development Board (HDB) to JTC Corporation, especially since there will be no change to the contracted terms and conditions of existing HDB industrial tenancies and leases.
But what’s notable is the beefing up of JTC’s role as an industrial landlord with an expanded portfolio and a master-planner. There may even be potentially higher participation as an industrial developer in the near future, market watchers note.
And indeed, there are older industrial properties that could be candidates for redevelopment in HDB’s industrial property portfolio.
In the first quarter of 2018, some 10,700 industrial units and 540 industrial land leases under HDB will be consolidated under JTC, the lead agency responsible for Singapore’s industrial landscape.
With clear benefits of streamlining of resources, higher efficiency and more comprehensive master-planning of industrial estates and facilities, one wonders why this consolidation exercise could not have taken place earlier. The Urban Redevelopment Authority (URA) had since the first half of 2014 passed the sales agent role for industrial land to JTC.
But a JTC spokeswoman told BT that the coordinating efforts between HDB and JTC to support the space requirements of industrialists have been ongoing for years.
“The consolidation of all public sector industrial land and properties under JTC will make it even easier and quicker for companies to find the most suitable premises for their business needs,” she said. “This is timely given our industry transformation efforts in recent years. JTC will be able to match companies’ space needs across the different stages of their growth with a larger supply of industrial land and space, including its innovative facilities.”
Clearly, the consolidation of all industrial properties under JTC allows the agency to undertake more holistic planning for industrial clusters islandwide. And with some HDB-managed factories being older and of lower land-use intensity, there is the possibility that JTC may decide to redevelop them to maximise the plot ratio, SLP International executive director Nicholas Mak reckoned.
From the list of properties to be transferred from HDB to JTC, those that caught the attention of industrial brokers as candidates for potential redevelopment include single-storey workshops sitting on prime plots such as Alexandra Village Industrial Estate, Sin Ming Industrial Estate, and Ang Mo Kio Industrial Park 1. Some believe that JTC may remove some of this older stock from the market since a number of new B2 plots for heavier industrial use have been released in recent years.
While the tenancy, lease policies, and rents of HDB and JTC’s industrial properties are generally aligned, there could still be differences in the way they are implemented, some brokers note. Talk on the ground is that HDB is seen to be a more easy-going landlord.
Though there is no criteria on value-add in JTC’s tenancy renewals in the same way as for assignment of leases, there is nothing to stop JTC from adopting the value-add criteria for future tenancy renewals, Knight Frank executive director and head of industrial Tan Boon Leong speculated. JTC is also perceived as more of a strategic developer of specialised space for cleantech, biomedicals, underground storage and data centres than a provider of conventional factory space, he added.
But it should offer much comfort to current tenants and lessees of HDB industrial properties that they will still be served by the 160 HDB officers responsible for industrial land and properties as these officers will be transferred to JTC.
Mindful of challenging business conditions, both JTC and HDB stressed the timeliness of rendering enhanced support for small and medium enterprises (SMEs), which make up the majority of the existing tenants or lessees of HDB-managed industrial properties.
Industrialists will soon only need to approach one single agency to access the full range of public sector industrial facilities available – including specialised industrial land and innovative facilities such as the high-specification development JTC Space @ Tampines North and large-scale industrial hubs like the JTC Food Hub @ Senoko that draw specialised trades under one roof.