There is a good chance you might already know about the classifications of the different industrial properties in Singapore, such as Business 1, Business 2, Business Parks & Science Parks. It is also common to stumble across some industrial warehouses and factories that are built to suit logistics operations, and semiconductor firms, to mention a few.
Business 1 or B1 industrial spaces are generally zoned for clean and light industries, usually with only light manufacturing that don’t need more than 50 meters nuisance buffers. No wonder it common to see B1 industrial buildings situated close to residential properties such as Housing Development Board (HDB).
Things tend to be different with B2 industrial for rent spaces as they are zoned for heavier industries that need nuisance buffers of more than 50 meters. This is mostly the case due to heavy manufacturing and production activities that may possibly lead to noise or air pollution. The buildings are usually not located so close to residential properties for these reasons.
It is also essential that you have a better understanding of the Goods & Services Tax (GST) in Singapore. For all industrial properties, whether for sale or for rental, GST are applicable for buyers or tenants who are purchasing or renting their units from GST registered companies.
But you should keep in mind that the taxes can only be claimable if the buyer or tenant is also a GST registered company. There is also the option of voluntarily registering as a GST registered company depending on the company’s direction and whether it makes business sense.
We can never conclude without talking about ancillary office. For industrial properties in Singapore, if 60% of the unit floor area is used for industrial activities, up to 40% of the unit area can be leveraged for ancillary office usage, showrooms, or approved supporting uses.
The 40% can be essential for supporting businesses considering it allows businesses to be more efficient and productive by not having to travel to a separate office site all the time. Either way, always take it upon yourself to better understand the industrial property market and regulations.
With this information, you stand a better chance of making a more informed decision by having the right fundamentals. Hopefully, this quick guide can come in handy the next time you want to take advantage of B2 industrial for rent services.