SINGAPORE INDUSTRIAL PROPERTY MARKET OVERVIEW
7 An assignment or transfer of lease refers to the transfer of estates, rights, title and interests in the property from the “Assignor or Transferor” (seller)
to the “Assignee or Transferee” (buyer).
2.2 RECENT GOVERNMENT POLICIES AND INITIATIVES
2.2.1 COOLING MEASURE - SELLER’S STAMP DUTY
The seller’s stamp duty (“SSD”) of 15%, 10% and 5% levied on industrial properties sold within one, two and three
years of purchase on or after 12 January 2013, respectively, remains in effect. However, this measure affects
mainly the strata-titled industrial sales market and is not expected to affect institutional investors of properties
such as REITs due to the typically longer investment holding period.
2.2.2 TOTAL DEBT SERVICING RATIO
Effective from 29 June 2013, individuals (including sole proprietorships and vehicles set up by an individual
solely to purchase property) will be subject to a Total Debt Servicing Ratio (“TDSR”) framework for all property
loans granted by financial institutions (“FI”). The threshold of TDSR or the percentage of total monthly debt
obligations to gross monthly income is set at 60%.
The TDSR framework affects mainly the strata-titled industrial sales market. However, institutional investors
like REITs may be affected indirectly due to the resulting moderation/stabilisation seen in the overall industrial
property market.
2.2.3 CHANGES TO HDB’S TENANCY POLICY
Since 16 October 2013, the Housing and Development Board (“HDB”) disallowed the assignment of commercial and
industrial tenancies for new tenancies and tenants exiting from their businesses must return the premises to HDB
for re-tender. A three-year window period was given to existing tenancies to help existing tenants make business
adjustments. However, the revised assignment policy is not expected to affect institutional investors like REITs.
2.2.4 CHANGES TO JTC’S TENANCY POLICIES
2.2.4.1 PAYMENT SCHEME FOR NEW ASSIGNMENT CONTRACTS
The revision of the payment scheme for new assignment contracts for sites allocated by the JTC to
one of upfront land premium remains relevant. From 1 January 2013, only buyers who are industrialists
have the option of paying land rent. Third party facility providers including institutional investors like
private property funds and REITs purchasing industrial buildings from sellers on JTC-leased sites will
have to pay an upfront land premium for the remaining part of the lease term.
2.2.4.2 REVISED ASSIGNMENT OF LEASE POLICY
Under JTC’s revised Assignment of Lease
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policy effective from 15 November 2013, industrial lessees
must fulfil the investment and plot ratio requirements (if any) stipulated in the Building Agreement/
Schedule of Building Terms/Agreement for Lease and occupy the leased premises for a minimum
period (otherwise known as Assignment Prohibition Period) before they can sell the property in the
open market. This is to ensure that lessees, who are allocated limited industrial land based on their
proposed business plans, remain committed to them for a sustained and reasonable period of time.
CAMBRIDGE INDUSTRIAL TRUST | ANNUAL REPORT 2014
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