HDB to forbid subletting of industrial space

SINGAPORE — From June, new and existing tenants of the Housing and Development Board’s (HDB) industrial properties will no longer be allowed to sublet their space.

However, tenants with existing approved subletting arrangements will be allowed to renew them up to Dec 31, 2017, to give them time to make business adjustments, the HDB said yesterday.

“The main purpose of the HDB’s industrial space is to support industrialists in operating their core businesses … This revision also seeks to promote more responsible and productive use of scarce industrial land, by encouraging tenants to rent only the amount of space that they need,” the board said.

Under current rules, tenants of HDB industrial properties are allowed to sublet up to 50 per cent of their floor space. About 380 tenants, or about 3 per cent of the total, are currently subletting space in their industrial properties.

The HDB manages close to 12,000 industrial properties island-wide. The board said tenants with excess space are encouraged to right-size their factories to smaller units and can renew their tenancies for a lower quantum at the end of their current terms.

The move by the HDB to revise its subletting policy follows the decision by industrial landlord JTC Corp last year to tighten its rules. Implemented in October, the rules limit the maximum amount of space that the main occupier of a JTC site can lease out to 30 per cent of total gross floor area, down from 50 per cent.

Industrialists whom TODAY spoke to said the HDB’s new policy would hit smaller tenants the hardest.

“I think those with smaller operations will be affected the most if they are not allowed to sublet. It will be a burden to them if they have to take on the rental of the whole place by themselves because many of them are one- or two-man shows,” said Mr Wong Kim Soon, who runs an aluminium production plant in Bedok Industrial Park.

“Those in the production line like us may not be affected because our operations are of a larger scale and we often lease the entire unit.” Lee Yen Nee