Promoting flexibility in Singapore’s industrial landscape

June 17, 2014 / By  

In addition to the three traditional industrial zonings in Singapore i.e. Business 1 for light industrial, Business 2 for heavy or pollutive industries, and Business Park for company offices, the state planning agency in 2009 introduced a “white” component to these industrial zones. The white component is mostly for retail/ancillary uses. Such sites typically offer higher plot ratios, which enable more flexible and productive use of these industrial lands.

The differentiating features of these industrial sites with a white component enable industrial developments to gravitate towards livelier and more flexible spaces, making these industrial areas more appealing to the younger workforce.

From the productivity point of view, the higher plot ratio not only improves the efficiency of the land by increasing the number of users but also the operational efficiency of these industrialists. For instance, the introduction of ramps allows industrial units on the upper level to have direct truck access hence improving overall production efficiencies. The use of cranes for hoisting containers to the upper levels is another innovation that improves the efficiency of very small land parcels. Additionally, the higher plot ratio encourages taller developments, moving these sites away from the traditional flatted-factory design towards more commercial-like developments. The provision of the white component has also added some vibrancy through the provision of retail amenities on the site.

Specifically for private developers, they have been capitalising on the higher plot ratio provisions through the strata sub-division of industrial developments and catering to smaller space occupiers, such as the small and medium-sized enterprises. One case is Oxley Bizhub, which was launched for sale in 2011 and registered an average unit price of SGD 651 per sq ft of strata area, some 20% higher than the average price of Business 1 strata spaces in the precinct where the subject property sits. Oxley Bizhub differentiates itself by offering recreational facilities, such as a swimming pool and gymnasium, and has attracted a varied group of occupiers, including lifestyle companies, design firms, technology enterprises and storage businesses.

As Singapore gravitates up the manufacturing value chain, it is inevitable that traditional industrial spaces will have to make way for higher valued uses through the intensification of land use and renewal of the occupier profile. It is expected that such flexible spaces, along with the Government’s push towards a higher value manufacturing landscape, will become the norm either through the government land sales programme or through private redevelopment projects. This would work in line with the state’s push for a work, live and play concept as well as ensure that the industrial landscape remains relevant to the needs of the younger workforce.

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