JTC INDUSTRIAL PROPERTIES (Sale to sitting tenants)

Mr Chia Shi Teck asked the Minister for Trade and Industry whether he will consider selling the industrial properties of the Jurong Town Corporation to sitting tenants.

The Minister for Trade and Industry (Mr S. Dhanabalan): Mr Speaker, Sir, JTC develops and manages four categories of industrial facilities, ie, standard factories, flatted factories, terrace workshops and prepared industrial land. The standard factories and terrace workshops are offered for sale on long-leases. At present, 84.8% of standard factory tenants and 36.7% of terrace workshop occupants own their facilities. In fact, they are not tenants, they are owners. The remaining who are sitting tenants and wish to purchase the facilities can apply to JTC to do so.

JTC is prepared to sell complete blocks of flatted factories and has done so. JTC will not, however, sell individual units within a multi-tenanted block of flatted factories because of the difficulties of managing both sold and rented units in the same block. Moreover, tenants wishing to expand their operations will have less flexibility to do so as they may not be able to buy contiguous space from existing owners. JTC's share of the flatted factory market is 22% compared with 60% for the private sector. Therefore, the private sector can more than meet any demand for flatted factory space both for sale as well as for rental.

JTC leases out prepared industrial land on an annual rental basis for 30 years, extendable to 60 years. JTC does offer, in response to requests by companies, the option to buy 60-year leases by paying an upfront premium instead of annual rental payments. Since the payment of an upfront premium ties up large amounts of capital for long periods, only a few companies have chosen this option.