Singapore’s industrial properties are the important infrastructures to support the sustainable development of its diversified industry. Over the past few decades, Singapore has found the vast transformation of its industrial developments from labour-intensive industries, to skill-intensive industries, to technology-intensive industries, and to knowledge and innovation-intensive activities in the 21st century.
industrial property buildingIn Singapore, industrial properties are well developed under a series of the regulatory conditions imposed by the Government. The Government imposes eligibility criteria for using industrial space and allocates land based on specific purposes, in accordance with the guidelines on land use.
Singapore’s industrial properties can be divided into three major categories: factory, warehouse, and business park. All of them can be multiple-user space. Industrial properties can also be classified into Business 1 (B1) and Business 2 (B2) categories zoning by the authorities. Developments classified under B1 use are meant for light and clean trades which are non-polluting. Such developments are usually found within housing estates. The polluting and general trades are put in industrial developments zoned for B2 uses and they are located in the sub-urban areas. The tenure of industrial properties can be mainly 30-, 60- , and 99-year leasehold, or freehold for the minority.
Similar to residential developments, an industrial development can be divided into many units with individual title. One of popular investment option in industrial property sectors is the strata-titled industry. As the Government imposes stricter measures on residential property, many property investors are switching to such new industrial projects offering higher gross rental yields at lower capital investment.
Buying an industrial property is different from residential property in some ways, especially in the field of finance.
industrial property buildingIn Singapore, industrial properties are well developed under a series of the regulatory conditions imposed by the Government. The Government imposes eligibility criteria for using industrial space and allocates land based on specific purposes, in accordance with the guidelines on land use.
Singapore’s industrial properties can be divided into three major categories: factory, warehouse, and business park. All of them can be multiple-user space. Industrial properties can also be classified into Business 1 (B1) and Business 2 (B2) categories zoning by the authorities. Developments classified under B1 use are meant for light and clean trades which are non-polluting. Such developments are usually found within housing estates. The polluting and general trades are put in industrial developments zoned for B2 uses and they are located in the sub-urban areas. The tenure of industrial properties can be mainly 30-, 60- , and 99-year leasehold, or freehold for the minority.
Similar to residential developments, an industrial development can be divided into many units with individual title. One of popular investment option in industrial property sectors is the strata-titled industry. As the Government imposes stricter measures on residential property, many property investors are switching to such new industrial projects offering higher gross rental yields at lower capital investment.
Buying an industrial property is different from residential property in some ways, especially in the field of finance.
- Unlike buying a residential property, an industrial property buyer has to factor in a 7% Goods and Services Tax (GST) on his purchase price. This is because the sellers are usually developers who are GST-registered companies.
- Similar to buying commercial properties, the usage of CPF money is not allowed for the payment of industrial properties.
- For end-user who buys an industrial property, the Loan-to-Value (LTV) is up to 80 per cent of the purchase price. For one buying to invest, the LTV is much lower at 60 to 70 per cent.
- Buyer of a shorter leasehold industrial property may face more restrictions when apply for a bank loan.
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