Er Lee Bee Wah: To ask the Minister for Trade and Industry (a) what is the guideline used by JTC to determine whether it will renew the lease of a piece of industrial land; (b) what is the guideline for the duration of a lease; and (c) whether JTC does ask its tenants to produce their balance sheets when deciding whether a lease will be renewed or when setting the rental rate for the new lease.
Oral Reply by Minister for Trade and Industry, Mr Lim Hng Kiang
1. As a development agency, JTC Corporation is entrusted to ensure that Singapore’s limited industrial land resources are put to the best possible use.
2. Companies applying for lease renewal are evaluated on the value-add they can bring to our economy, synergistic linkages to other sectors, ability to create good jobs and ability to optimise land use.
3. JTC customers seeking lease renewal are required to submit their business projections and a copy of their latest audited financial statements. The latter will be used to support the business projections and proposed investment commitments.
4. Rental rates for new leases are based on the prevailing posted rate which is published by JTC on a 6-monthly basis. JTC does not use the submitted financial information to set rental rates for the new lease.
5. A typical lease term is for a duration of 30 years. Generally, leases can be renewed up to a maximum of 30 years, inclusive of the lessee’s remaining unexpired lease term. The length of the renewed term would also depend on whether there are redevelopment plans for the site. If so, the lease on the site may be renewed for a shorter period.
6. Given our acute land constraint moving forward, JTC will continue to allocate industrial land judiciously to ensure long term sustainable growth for Singapore’s economy.