Tag Archives: JTC

CFE calls for government to review land use and planning guidelines

The Committee on the Future Economy (CFE) calls for greater land-use flexibility by allowing complementary activities to be located near each other–  value chains and industries can be integrated and synergies enabled among developments in a precinct.

Given the blurring line between services and manufacturing, the CFE also proposed that flexibility of land use be allowed in industrial areas as this will open the way for businesses of different sectors and functions to co-locate, find synergies and catalyse innovation.

The Urban Redevelopment Authority (URA) is working with state industrial landlord JTC and the Economic Development Board (EDB) under Ministry of Trade and Industry.

Industry players say Singapore may need to create more zoning categories or expand existing definitions of use for industrial space.

Another planning guideline – that of the “60-40 rule”, which requires at least 60 per cent of gross space in a building or strata unit to be used for industrial activities, with at most 40 per cent left for ancillary purposes – is another restrictive policy that needs review.

The government has, in the past, rolled out “white” sites and business park white zones in the Master Plan to offer developers some autonomy in deciding the most appropriate mix of uses for each site. However, it has remained prescriptive in listing permissible uses and planning specifications for these sites.

The US practises what is called “performance zoning”, under which land development and use are circumscribed by performance standards; for example, these standards can limit the intensity of development by stipulating the maximum level of noise or strain on the transportation system.

 

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Furniture Hub to be built in Sungei Kadut

The JTC Furniture Hub @ Sungei Kadut will be the first specialised, high-rise and multi-tenanted development to bring furniture companies and related service providers together, says Senior Minister of State for Trade and Industry Lee Yi Shyan.

A specialised high-rise development for the furniture industry will be set up at Sungei Kadut to help Singapore firms operate more efficiently, Senior Minister of State for Trade and Industry Lee Yi Shyan said on Friday (Mar 13).

He said the JTC Furniture Hub @ Sungei Kadut will be the first specialised, high-rise and multi-tenanted development to bring furniture companies and related service providers together. Through clustering, companies can redesign their business processes to maximise operational efficiency.

The Singapore Furniture Industries Council (SFIC) will manage a training institute within the hub, along with a design lab and a showroom for both trade visitors and the general public, added Mr Lee, who is also Senior Minister of State for National Development.

JTC is developing a new generation of industrial space with shared facilities as a key feature to help various industries. For instance, companies located in JTC’s new Food Hub can make use of a shared integrated cold room warehouse.

Speaking at the opening of the International Furniture Fair Singapore 2015 (IFFS) and the 32nd ASEAN Furniture Show (AFS), Mr Lee said Singapore’s furniture industry has maintained a healthy growth rate over the years due to constant upgrading efforts and focus on creating value in design and branding.

Last year, the industry’s revenue rose by 2.8 per cent to reach an estimated S$6.3 billion.
http://www.channelnewsasia.com/news/business/singapore/jtc-to-set-up-furniture/1713394.html

Below are the speech delivered by Lee Yi Shyan
It is a pleasure to join you at the opening of the International Furniture Fair Singapore 2015 (IFFS) and the 32nd ASEAN Furniture Show (AFS). I am told that this year’s edition is even larger than last year’s – with over 480 exhibitors from 39 countries. My heartiest congratulations to the Singapore Furniture Industries Council (SFIC) – the organiser of the two shows.

Staying competitive amidst a changing economic landscape

2. As an export-oriented industry, our furniture industry has maintained a healthy growth rate over the years. The industry’s revenue rose by 2.8% from 2013 to reach an estimated $6.3 billion[1] in 2014 while maintaining productivity growth. This is the result of their constant upgrading efforts and focus on creating value in design, branding and pursuit of qualities in their products.

3. As Singapore’s economy goes through the current phase of restructuring, the furniture industry and other industry verticals have to quicken the pace of change to stay ahead of competition. Let me explore with you, possible ways forward for the industry to re-invent and transform itself.

Growth opportunities in urbanising Asia

4. In the coming two decades, Asia will continue to urbanise. Existing cities will grow larger, new cities will spring up. When people purchase new homes, they will need furniture. If they live in large houses, they will need certain type of furniture. If they live in apartments like us in Singapore, they will need furniture which is space-saving, multi-purpose, elegant but functional, and compatible with modern and digital lifestyle.

5. Hence if we zoom in to furniture best suited for apartment living, we ought to have specialist expertise in space solutions. Our firms in this segment are no longer furniture manufacturers, but specialists in space solutions drawing upon design and incorporating innovations.

Creating unique value

6. Having an understanding of what export markets need is therefore critical to our firms’ ability to provide furnishing solutions to the end customers. As connected smart devices become ubiquitous, it is hard to imagine a large piece of sofa or bed in the middle of the room remaining “unconnected” and “dumb”. Question is what do we need to add, to make it useful to the end customers?

7. Jackson Global, a specialist manufacturer of window covering systems, has designed a new series of smart curtain and blinds systems with the use of light and humidity sensors. The system responds to external environmental conditions such as the amount of sunlight and moisture, and draws by itself to maintain an optimal indoor temperature and lighting for home users.

8. Just a few days ago, I also read that IKEA is beginning to market tables or desks that can charge up your smart phones. Perhaps someone is looking at embedding touch-screen tablets on the coffee table? Or wardrobe mirrors that analyses your mood or make-up needs for a particular day?

9. Sometimes the best way to create value is to “borrow” ideas from other industry verticals.

10. Apple Watch is an example. Apple is working with medical institutions to use Apple Watch as data collection device for health and fitness research. It is also working with banks and commercial partners to enable Apple Watch as a payment device. This is Apple’s attempt to make its new smart watch indispensable for individuals embracing digital lifestyles. What would our furniture designers do to create furniture solutions that fit right into the lifestyles of smart living or an aging population?

Growing sales in the international market

11. For our local firms to grow, internationalisation is an important pathway. Our industry players have internationalised for many years – nearly all have established overseas production bases, and have been exporting to Asia, Europe and the Americas.

12. But to stand out from the competition is never easy. Local customization is often needed to capture a significant share of the market.

13. Consider the example of Scanteak. They collaborated with OutofStock, a Singaporean design studio, to create a unique line of home furniture called “Prologue” that is tailored to the Japanese way of living. Market response has been positive and Scanteak continues to enjoy steady revenue growth in Japan.

14. Having knowledge of export markets is also important for market entry. Sitra Holdings, Ewins and Getz Brothers are companies with complementary products – Sitra offers outdoor timber products, Ewins offers natural veneer cladding, and Getz offers interior flooring materials. Last year, they came together to conduct a feasibility study of the Philippines market. They are now engaging an in-market consultant to help them seek deals and arrange business matching meetings with prospective clients in the Philippines.

Ample government support

15. At the company level, furniture firms should make full use of Capability Development Grant (CDG). I am encouraged to see the furniture industry’s receptiveness towards building new capabilities. In the last 3 years, more than 60 projects from the Singapore furniture industry have been supported with CDG.

16. For example, Matsushita Greatwall, a manufacturer and distributor of bedding products such as King Koil mattresses, invested over $1 million in high-tech machinery to streamline and automate its mattress production line using the CDG. This has allowed the company to achieve manpower savings of 16 per cent while simultaneously attaining a 20 per cent increase in output.

17. To further strengthen our furniture industry, I am pleased to announce that JTC will be setting up a JTC Furniture Hub @ Sungei Kadut. The Furniture Hub will be the first specialised high-rise and multi-tenanted development to cluster furniture companies and related service providers together. Through clustering, they can redesign their business processes to maximise operational efficiency.

18. Within the hub, SFIC will be managing a training institute, design lab and a showroom for both trade visitors and the general public. Having these co-located with our industrialists will foster collaborations and strengthen the furniture industry ecosystem. The hub will help local enterprises improve productivity, enhance competitiveness, and establish Singapore as an ideal sourcing location for the furniture industry.

Conclusion

19. IE and SPRING Singapore have been working with SFIC to develop initiatives that will help transform the industry’s capabilities in innovation, design and exports through the LEAD[2] programme. I would also encourage SFIC and companies within the industry to make use of other resources, such as our Centres of Innovations, research institutes under A*STAR, our universities, and facilities under the DesignSingapore Council, to research on user interface ergonomics, environmental friendly materials and advanced construction methods. There are unlimited possibilities.

20. Our economy has reached an inflexion point. We need to quicken our restructuring and create much greater value through product innovation and higher productivity. I look forward to SFIC’s continued leadership to make this quantum leap toward the future, together. Thank you.

http://www.news.gov.sg/public/sgpc/en/media_releases/agencies/mti/speech/S-20150313-1.html?AuthKey=9e7ba7f0-7117-8448-8816-d7f0cf9edf15

New property zone in the making

IN what could be a precursor to the creation of a new class of space – between office and light industrial – JTC Corporation is understood to be spearheading the development of a building, expected to be in Woodlands, that will provide affordable space for rental to companiesthat provide manufacturing-related services but do not have industrial production in Singapore.

This is in response to feedback in recent years from trade associations that there is a lack of affordable office space in Singapore. At the same time, many businesses do not qualify for the use of cheaper premises zoned for Business 1 (or B1) use, where typically light industrial and warehouse uses are allowed – since they do not have manufacturing operations here.

Moreover, the Urban Redevelopment Authority (URA) has a planning rule that effectively forbids the use of industrial space as pure offices. In the past few years, the authorities have strengthened enforcement action against unauthorised use of B1 space.

This has led to calls from some quarters urging URA and JTC to relax the definition of permitted uses in the B1 zone – to keep pace with the changing industrial production landscape, with a blurring of the traditional division between manufacturing and services.

However, instead of relaxing B1 use – which could be seen as penalising those that have been adhering to the approved uses of this zone and condoning those that have been flouting planning regulations – the authorities seem to prefer a new intermediate zone between B1 and commercial.

Industry observers reckon that rental in the new building could be slightly higher than that for B1.

It is thought that JTC is planning a pilot project to get a sense of the level of genuine demand for such space. If there is deep demand, the statutory board could offer more of such space or even sell land with the new zone through the Government Land Sales Programme for development by the private sector, guessed analysts.

Market watchers commented that the Woodlands location is ideal to test demand for the proposed zone.

Its proximity to Iskandar Malaysia would allow companies to locate their factories in Iskandar where industrial space is cheaper and house supporting value-added services in the JTC pilot project, said a market observer.

Preliminary information about the new building could be released over the next few months, BT understands.

When contacted, JTC said: “URA’s Master Plan 2014 identified several new growth areas that will provide new commercial and business spaces and bring jobs closer to homes. They include the Woodlands Regional Centre, which is envisioned to be a vibrant live-work-play business hub with new transport connections . . .

“JTC is working with URA and the relevant agencies on the detailed plans for these growth areas. We are engaging industry players to get ideas.

The details are still being worked out.”

Market expectations are that JTC is likely to allocate space in the proposedprojectona rental basis to qualifying users only if they meet stringent criteria that are likely to include proof that their organisation is involved in manufacturing – even though production is located overseas.

Such tenants could potentially use the space for their headquarters, distribution hub, buying office, design centre, servicing and other approved functions. Clear-cut office uses such as the activities of advertising firms, lawyers and front-end operations of banks will not be allowed in the new zone.

DTZ South-east Asia chief operating officer Ong Choon Fah said: “The nature of manufacturing has changed with the knowledge-based economy and so there is a need for the definition of manufacturing space to evolve alongside this transformation.”

Currently, at least60 per cent of total floor area in each strata unit in a B1 development must be set aside for core industrial activities such as clean and light manufacturing, assembly and repair, or warehouse and storage.

The other 40 per cent may be for supporting purposes including ancillary offices.

However, standalone offices that do not support core manufacturing activity by the same occupier in the same premises do not qualify for B1 use. The rule is intended to ensure industrial space is used predominantly for industrial activities.

– See more at: http://news.asiaone.com/news/singapore/new-property-zone-making#sthash.gwEmjsVA.dpuf

JTC seems to be taking an incremental planning approach through the proposed intermediate zone between Business 1 (B1) and commercial uses. Had it opted for a big-sweep rezoning of some areas of Singapore from say B1 use to the new zone, that would cause major problems for both owners and tenants of B1 premises.

JLL head of South-east Asia research Chua Yang Liang said: “A step-by-step measured approach will allow JTC to test-bed the proposed zone, study the impact and adjust the concept if necessary before widening its implementation. To do a widespread change of use overnight from B1 could create severe knock-on effects in the market.

“For instance, there may be repercussions for occupiers who are validly operating within B1 premises if the landlord decides to go for an upgrade to this intermediate zone – because the landlord would then want higher-paying tenants commensurate with his additional investment in the property.”

Agreeing, an industrial property analyst said: “The whole look and ambience of the building would also change . . .”

On the other hand, if the owner decides to stick to B1 zoning, the genuine B1 tenants may continue to operate in the building but tenants whose activities don’t comply with B1 usage have to leave. Even if some time is given for the transition, such occupiers would still have to leave within a definite timeframe, he added.

From a landlord’s perspective, there could be big monetary implications. The owner of a B1 building considering getting his property rezoned to the new use with a view to complying with the law – for instance, if he has tenants whose activities are not permitted for B1 zone (such as pure office use) – would be staring at the prospect of paying a substantial differential premium to the state for the enhancement in use.

DTZ South-east Asia chief operating officer Ong Choon Fah said: “If you suddenly change the rules of the game, it could jolt the market. It is better to take an incremental planning approach and test out new concepts gradually.”

Knight Frank executive director (industrial) Lim Kien Kim said that JTC’s move to develop a new building under the planned intermediate zone would further weaken industrial rents. “The government has created a lot of Business 1 space in the past few years through the GLS Programme. So now they are clamping down on unauthorised use of such space and going to create legal space for these people. That will potentially drive down demand for B1 space and have an adverse impact on B1 rents and capital values.”

He also suggested that JTC should consider piloting the new zone at one of its projects such as Seletar Aerospace Park, CleanTech Park and MedTech Hub, where there is some vacant space – instead of developing a new building in Woodlands to try out the concept.

However, Mrs Ong said: “There may be some vacancy in these projects but they are intended for very specific use. It takes time to germinate and nurture ideas; for instance, one-north also took a while before it took off.

“As lead agency in this space, JTC will always push the boundary and experiment with new space because it can take a longer-term view. JTC has to be the initiator and innovator. Once the market has accepted the new concept, the private sector can start to develop.”

The authorities’ decision not to relax permitted uses for the B1 zone – at least for now – is unlikely to go down well with industrial property agents who have been lobbying for such a move. A key plank of their argument is that Singapore’s manufacturing landscape is changing; there is now less traditional “hard core” production here but more service type activity as the Republic ascends the production value-chain.

Of course, a broader range of uses for B1 zone would also make it easier for agents to lease out such space, boosting demand, rents and prices. There is market talk of investors who have been stuck with B1 units, especially those snapped up in projects built to office specifications instead of being designed to cater to the needs of genuine industrialists. It is difficult to lease out such units given the strict enforcement by the authorities against illegal use of industrial space.

Some analysts point out that had the authorities acceded to a request to allow standalone offices, for instance, that would penalise those who had been adhering to the approved B1 uses.

“Moreover,” Mrs Ong said, “it would undermine the push towards developing decentralised offices in places like Paya Lebar and Jurong East.”

The incidence of businesses illegally using B1 space as pure offices (that is, without any core industrial or warehousing activity) gathered momentum during the office shortage that preceded the 2008 global crisis. At the time, office rents were shooting up and more companies had quietly moved into premises zoned for B1 use, to keep a lid on rental expense.

Moreover, B1 developments are typically near major transport nodes and in established areas such as MacPherson, Ubi and Tai Seng – making them an attractive alternative space for office tenants.

Around the 2011-2012 period, there were mounting complaints that such tenants whose activities were not in compliance with B1 use, were driving up rents for genuine industrial users. About the same time, a string of new strata projects on B1 sites came to the market boasting features and specifications that more closely resemble office buildings than industrial premises. Units in such developments were the subject of much speculative demand.

So the authorities stepped up enforcement action against tenants and landlords who were flouting the rules on B1 uses. And in early 2013, a seller’s stamp duty was introduced on industrial property to discourage short-term speculative activity that could distort industrial property prices and raise occupancy costs for businesses.

Prices, rents of industrial space taper off

Prices and rentals of industrial space kept moderating in tandem with occupancy rates in the third quarter after a rise in supply of industrial land and space by the Government in recent years.

Tender prices for industrial government land sale sites targeting multiple-user developments have also declined, said state industrial landlord JTC yesterday.

Indicies for industrial space and multiple-user rental fell by 1.8 per cent and 2.2 per cent respectively, quarter on quarter.

Year on year, those two indices declined by 1.3 per cent and 2.3 per cent respectively.

This is the first year-on-year drop in rentals since early 2010, in contrast to the average increase of about 8 per cent a year over the past four years, said JTC.

Prices of industrial space also kept stabilising, with the industrial space and multiple-user factory space price indices falling by 0.9 per cent and 1.8 per cent respectively, quarter on quarter.

These falls reverse their respective gains of 0.7 per cent and 2.5 per cent in the previous quarter.

Colliers International director of research and advisory Chia Siew Chuin said the fall in multiple-user factory prices is not surprising, given the subdued state of strata-titled industrial property sales amid a price standoff between buyers and sellers.

Year on year, the industrial space and multiple-user factory space price indices rose by 0.2 per cent and 3.4 per cent respectively, significantly slower than their average rises of about 16 per cent per year over the past four years.

After a 0.9 percentage point decline in the second quarter, the occupancy rate of the overall industrial property market edged up by 0.2 percentage point quarter on quarter to 90.9 per cent in the third quarter.

This was on the back of a 1 per cent rise in demand, outstripping a 0.8 per cent increase in supply.

The better occupancy rate was driven by the warehouse segment, mainly due to the take-up of a few new single-user warehouses.

For multiple-user factory space, the occupancy rate fell by 0.5 percentage point to 86.8 per cent, the lowest level since late 2007, as a 1.5 per cent increase in supply outstripped the 1 per cent increase in demand.

Year on year, the occupancy rate of the overall industrial property market slid 1.8 percentage points to 90.9 per cent.

For multiple-user factories, the occupancy rate fell by 3.3 percentage points to 86.8 per cent.

Looking ahead, about 1.2 million sq m of industrial space, including 167,000 sq m of multiple- user factory space, is set to come onstream this quarter, bringing the full year supply of industrial space to 3.1 million sq m.

A further 2.6 million sq m and 1.9 million sq m of industrial space is tipped to come onstream in 2015 and 2016 respectively.

This is significantly higher than the average annual supply and demand of about 1.4 million sq m and 900,000 sq m respectively in the past three years, and is likely to exert further downward pressure on occupancy rates, JTC noted.

The Government will keep monitoring the industrial property market closely to ensure that the diverse needs of industrialists are met, it added.

“Appropriate measures will also be introduced where necessary to promote a stable and sustainable industrial property market.

“JTC will also continue to develop more specialised and innovative facilities with productivity- enabling features such as shared facilities and services, to support the growth of key industry clusters and catalyse new ones in the coming years.”

Ms Chia reckons sentiment is expected to remain mixed in the final quarter, given the uncertainties surrounding the global economic recovery.

– See more at: http://business.asiaone.com/news/prices-rents-industrial-space-taper#sthash.hzcNEEzf.dpuf

New Tua sites launched

JTC yesterday launched for sale two far-flung sites at Tuas Bay Close and Tuas South Street 7 (Plot 44) under its H2 2014 Industrial Government Land Sales (IGLS) programme.

JTC said their different land tenures and plot sizes were aimed at catering to different groups of industrialists – those who prefer to buy strata-titled industrial property and those who want the flexibility to custom-build their own facilities on smallish sites.

The 2.7ha site at Tuas Bay Close is one such site that can be strata-subdivided for sale. It is zoned for B2 development, for heavier and more pollutive industrial use such as metal stamping, welding and chemical processing. It comes with a 30-year tenure with a maximum gross plot ratio of 1.7, which means it can be developed into a project with up to 4.6ha gross floor area.

Analysts expect the plot to attract two to five bids, with a winning bid of S$65-80 psf per plot ratio (psf ppr).

Separately, the 0.5ha site at Tuas South Street 7 (Plot 44) was successfully triggered for sale from H1 2014’s reserve list with a minimum bid price of S$3.527 million.

A site on the reserve list is launched for tender only upon successful application by a developer, while confirmed list sites are launched according to schedule, regardless of demand.

This site is also zoned B2 and has a 20-year- 10-month tenure and a maximum gross plot ratio of 1.0. Analysts said this site will likely attract interest from contractor-developers (developers with construction and engineering arms, e.g. Koh Brothers) and average-sized industrialists.

A plot of this size would save these industrialists the need to amalgamate adjacent small sites, said R’ST Research’s director, Ong Kah Seng.

“The end-product on the site is likely to be a no-frills, low-rise single-user factory. Space allocated for such uses is set to diminish as Singapore trends towards modern, high-tech, and value-added industrial activities in sync with its global city image.”

He added that most of the sites to be released by the government in the second half are fairly large, so bidders of this site may bid competitively amid the limited new supply for such “rare” sized Tuas industrial plots.

Five to 10 bids are expected, with the winning bid anywhere between S$68-100 psf ppr.

SLP International research head Nicholas Mak believes the party who triggered this site may want it for corporate strategic reasons. “If this site were launched for tender as a confirmed list site, the possible range of top bids could be lower,” he said.

The tender for the Tuas Bay Close plot closes on Sept 23, while that for Tuas South Street 7 (Plot 44) closes on Sept 9.

The government has been releasing many Tuas sites in recent years to cater to industrialists’ end use – both small plots for those with affordability constraints and bigger ones for major industrialists with mega industrial operations.

These sites are also less likely to attract speculators and investors because of their remote locations, and for B2-zoned plots, their grimey nature. Shorter tenures, while posing some loan financing challenges, further boost their affordability.

http://www.businesstimes.com.sg/premium/singapore/jtc-launches-2-more-tuas-sites-sale-20140730

Industrial land supply up, stabilising rents and prices

THE increase in the supply of industrial land has stabilised rents and prices in some categories while sending occupancy rates down to levels not seen since 2007.

The occupancy rate of the overall industrial property market dipped to 90.7 per cent in the second quarter, according to data from state industrial landlord JTC yesterday.

Occupancy for multiple- user factory space – intended for light industry and most commonly used by small and medium-sized enterprises – is at 87.3 per cent.

JTC attributed this to the increase in supply of land by the Government in recent years.

Ms Chia Siew Chuin, the director of research and advisory at Colliers International, said the buoyant strata-titled industrial sales market from 2010 to 2012, which resulted in more redevelopment projects in the private sector, was another contributing factor.

The dip in occupancy might also have been due to stricter enforcement over who qualifies to use the space as well as the time lag between project completion and physical occupation of the space, said Ms Chia.

Rents stabilised in the first half of the year, in line with lower occupancy, going up just 0.3 per cent. This was much lower than the 4.7 per cent increase in the second half of last year, and the 4.3 per cent hike in the first half of last year.

Industrial rents slipped 0.1 per cent in the three months to June 30 from the first three months of the year but they were still 5 per cent higher than in the same period last year.

This was slower than the average increase of 10.2 per cent per year over the past four years, JTC said.

Prices of industrial space have also settled down. They rose just 0.7 per cent in the second quarter from the first and were 3.9 per cent higher than the second quarter last year.

These rises are also a far cry from the average increase of 18.8 per cent per year over the past four years, JTC said.

The leasing market could continue to see healthy activity over the next six months, said Ms Chia, thanks to Singapore’s attractiveness as a base for regional headquarters and research and development centres for firms looking to grow their footprint in South-east Asia.

Industrial rents are expected to remain stable or ease marginally over the next six months, as industrialists are likely to remain cost-conscious, given the still-uncertain global economic environment, added Ms Chia.

Besides releasing more land, the Government “will also ensure that upcoming industrial developments better serve the needs of industrialists”, JTC said yesterday.

About 1.8 million sq m of industrial space will become available in this half of the year, of which 400,000 sq m will be multiple-user factory space.

– See more at: http://business.asiaone.com/news/industrial-land-supply-stabilising-rents-and-prices#sthash.djZk7iHz.dpuf

 

Singapore ready to control industrial prices and rentals

A SLEW of measures targeted at controlling industrial prices and rentals in Singapore are in place, JTC said on Thursday.

JTC said it has a series of development projects in the pipeline to provide space solutions for industrialists in different industries.

For instance, more space will be made available in JTC CleanTech Two @ CleanTech Park, following the project’s completion of 11,590 sqm of space in February this year, to cater to research-related companies and institutions.

Beyond these projects, JTC will continue to develop next-generation high-rise developments with productivity-enabling features to cater to industrialists in the coming years, it said.

http://www.businesstimes.com.sg/breaking-news/singapore/too-early-ease-singapore-property-cooling-measures-mas-20140724