SINGAPORE — The Housing and Development Board’s (HDB) largest industrial estate in terms of land area has been selected to undergo redevelopment and businesses there are worried about a space crunch as well as business viability.

Defu Industrial Estate, built in the ’70s to house relocated small and medium local industrial enterprises, will be “progressively replaced with new and modern industrial complexes” over the next 15 to 20 years.

According to a statement by the HDB yesterday, there is a need to redevelop the 30-year-old estate “to optimise the use of scarce land resources and to contain pollution caused by existing industries”. When the new Defu Industrial Park is completed, the total amount of factory floor space will increase by five times to 2.1 million sqm.

Currently, the estate houses 1,046 factories, of which about 91 per cent are in the food production trade.

The redevelopment will be conducted in three phases, with the first phase set to begin construction in 2015. The HDB will build a new Bedok Food City at Bedok North Avenue 4 to rehouse the factories in the food industry. Factories in the general industries will be relocated to the new Defu Industrial City, which is located at the former Kim Chuan Water Reclamation Plant.

Some businesses will be allowed to continue operating in their existing premises until the new complexes are completed in mid-2017. They will also be given relocation benefits such as rent concession, rent-free fitting up period and ex-gratia payment. For example, an ex-gratia payment of S$48,000 per relocated unit will be given to eligible affected tenants.

Most businesses interviewed preferred not to move from Defu as some raised concerns over a possible decrease in the size of their operating space. “The proposed size of the new site is too small. We might get less than half of our current land size when we move,” said a hardware industry business owner of over 30 years who declined to be named.

Some businesses said they might move their operations overseas if the new Bedok Food City does not cater to their needs. But not all are able to shift their operations out of the country.

“This is our forefathers’ trade. We are catering to local people and we will not be able to survive if we go out of the country,” said Mr Vincent Lim, owner of Teck Seng Metal. Additional reporting by Desiree Tay and Louisa Tang