Market watchers say the latest changes in JTC policies will benefit genuine industrial users but discourage property speculators.
From Nov 15, JTC will lengthen the prohibition period for lease assignments and increase the minimum occupation period for anchor tenants who do sale and leaseback arrangements.
This amended policy has the twin effect of removing from the allocated industrial land market real estate punters disguised as faux industrialists and also projecting some fairness that now, even larger SMEs who had successfully lobbied for industrial land to build their premises, have to stay committed to their original cause for a longer period of time.
Another effect is that the number of secondary-market deals for industrial premises on JTC-leased sites is set to decline. This in turn will hit industrial property brokers, analysts say.
A key change is that industrialists who sell their premises on JTC-leased sites to a third-party facility provider such as a real estate investment trust (Reit) and then lease back the asset as an anchor tenant, under JTC’s Sale and Lease Back Scheme, will now be subject to a longer minimum occupation period (MOP).
Industry players predict the longer leaseback period will end the game played by some industrialists with a keen eye on the property market, who had been buying land from JTC to develop an industrial property and then selling it to a Reit for a handsome gain. They did not mind having to pay a high rent under the sale and leaseback deal as it was often for a relatively short period of, say, under three years.
Another way in which the change in JTC rules will reduce speculative transactions is the longer lease assignment prohibition period for those who buy JTC facilities from the secondary market.
Source: Business Times –6December 2013
Like Us @ Facebook www.facebook.com/NewProjectLaunch
Feel free to read more info @
Singapore New Project Launches 
Leave a comment