Property prices in Singapore have varied over the past few years; the prices have always been fluctuating making the public quite confuse. However the investment in industrial property over the years has increased and more and more people have started preferring industrial properties as investment over the residential properties. The property types and the lease tenure are different in certain areas, so a lot of research is required.

The types of industrial property

Industrial property in Singapore is classified into two groups, so before buying an industrial property it is important to understand the two types. There is the B1 and B2.

  • The B1 generally refers to areas that are to be used for industry, utility, telecommunication and warehouses purposes, for which the authority concerned does not impose a nuisance buffer of more than 50m.
  • The B2 refers to the areas that can be used for industry, telecommunication, utilities and warehouse. Unlike the B1 in the b2 industrial for sale there is a nuisance buffer imposed for more than 50m, and they have to be within the safety and health limit. The following activities are allowed under the B2 industrial building category:
  • The biotechnology
  • Vehicle repair
  • Vehicle servicing
  • Warehouse
  • Gas installation
  • Industry generation plant
  • Manufacture of furniture
  • Fixtures
  • Manufacturing of electrical supplies

Things to know

There are a few things that one should know before investing in industrial property:

  • The types of industrial buildings : As mentioned earlier the industrial buildings are divided into two categories the B1 and the B2; the warehouses, workshops are activities that can be houses and held within these industrial building. The only difference is the nuisance buffers between the two; b1 does not require a nuisance buffer of more than 50 m while B2 requires nuisance buffers of more than 50m according to the national environment agency. So before buying an industrial property in Singapore it is important knowing the different categories of industrial building that you are buying because the building type would be determined by the type of business that one would do.
  • The tenure period : The industrial buildings per square are expensive but there are some strata titles units that are affordable. The industrial tenure for most of the industrial properties is mostly 30 to 60 years, so due to the short tenure the properties command a higher rental price.
  • ABSD and SSD : The ABSD or the additional buyers stamp duty is not liable on industrial properties but the SSD or the seller’s stamp duty does apply to industrial properties if they are bought after Jan 2013.
  • GST- There is a 7 percent goods and service tax (GST), which needs to be paid by the buyers on the purchase of units.
  • The 60:40 ratio : Those purchasing industrial properties whether B1 industrial for sale or the b2 industrial for sale they need to keep a aside 60 percent of the whole total floor area only for industrial activities. 40 percent of the floor area has to be used for showrooms and other space for supporting the business and industrial activities.
  • Tax : The property tax on industrial properties is known to be 10 percent in Singapore, whether it is owned or rented.

How to choose a location?

While looking for an industrial location it is important to look for the four things which are the most essential:

  • The location- The location of the industrial property is the most important factor to consider; no matter whether you are buying it or leasing the property. See how accessible the location is and how good the public transport is till that place. The location should be easily reachable in order to ensure a thriving business.
  • The availability of workforce- For the proper operation of business it is necessary to have the required number of workers. Do a proper research regarding the demand of jobs in that area and see whether there is connectivity near that area so that the workers can easily travel. The well connected the area the more employees would work there.
  • Size- All the industrial properties are quite close to each other so it is important to see and choose the right size of the property. Make sure there is quite a large storage space so that everything can be easily noticed and there is nothing un-organised. You have to see whether there is scope for your business to grow if there is then there is should be room for space in the future, less space can be an issue.
  • The layout- Once you have decided the property and the size then one thing to focus on is the layout. See the ceiling height and the spacing, think what all you would be storing and the operations that would be conducted and then see whether the layout is such that it can accommodate all these things.

It is important to ask oneself that whether the location of the property is right and apt for businesses to run industrial activities.

So there are plenty of things to consider while getting an industrial space especially if it is b2 industrial for sale, as it has to follow certain environment and health norms. Not only B2 keep these things in mind while purchasing b1 industrial space also, and then there is the URA which allows 60:40 ratios which is another thing worth knowing about before purchasing an industrial space.

Singapore has witnessed a number of changes in the property sector and there is also a change in the demands of the people which is why it is important to look at all the business functions that the Singapore real estate has and then come to a decision. There are array of options to choose from but the decision period should be utilised to think all the pros and cons and weight them before finalising a property as it is about the future of your business.