Chapter 6: Managing Industrial Property Flashcards
Classification of Industrial Properties
- Business 1
- Business 2
- Business Park
Business 1 (B1)
- used for industry, warehouse, utilities and telecommunication uses
- relevant authorities (NEA) does require a nuisance buffer greater than 50m.
Business 2 (B2)
- for industry, warehouse, utilities and
telecommunication uses - business uses will be will be imposed with nuisance buffer more than 50m and within health and safety buffers
Business Park
- used for non-pollutive industries
- engage in high technology, research and development, high value-added and knowledge intensive activities
Types of Industrial Property
- conventional
- high-tech
- business park
Conventional Industrial Property
- make up most of JTC standard factories
- as well as flatted factories by private developer
- main provision: loading & unloading and parking of lorries.
High-Tech Industrial Property
- improvement made to conventional buildings to cater to high tech industries
Business Park Definition (physical qualities)
- a development with good quality buildings of a reasonable size, attractive landscaping & social facilities
Physical Characteristics of Business Parks
- High priority on work environment in terms of the quality of landscaping
- ample parking space as they have qualified, middle class workers who drive to work
- Strategically located along highways and in proximity to residential areas
- park usually designed to take advantage of natural features.
- size can vary from 10 hectares to 1000 hectares
types of tenants of Business Park
- bio-technology
- test lab
- software development
- research & development
Management of Business Parks
- flexible estate management are essential
- Good tenant relations
- High degree of daily maintenance
- management acts as facilitator between companies and park
- maintenance
- management centralized * managed by professional body
what does it mean by flexible estate management
- short leases
- replacement lease for larger premises
what does it mean by maintenance in business parks?
- retain unique identity, prestige, and quality
what does it mean by high degree of daily maintenance?
- landscaping
- security
what does it mean by good tenant relations
- close contact
- informal lunches, meetings
is management of a business park property just collecting rent?
- no
- also need to know detailed operation of the highly technical companies
- must be a rapid response to all enquiries and foreseeing companies’ future requirements before even they themselves are aware of them.
Types of industrial leases
- ground lease
- sale & leaseback agreement
what is ground lease
- agreement between a landlord and a tenant for the lease of vacant land
- is long term lease
what is an important provision of ground lease?
tenant’s promise to erect a building on the vacant land which reverts to the landlord together with the land upon expiration of the lease
meaning tenant build building, and after lease ends building also go back to landlord
what is the sale & leaseback agreement
- current owner & user of commercial property decide to offer property for sale
- but only on condition that buyer simultaneously enter into a lease which current owner retains right to use & possess property
net leases:
- single net
- double net
- triple net
what expenses are paid by who in a single net lease
tenant: rent + property tax
owner: maintenance + other operating expenses
what expenses are paid by who in a double net lease
tenant: rent + property tax + proportionate property tax insurance
owner: external expenses of repairs & maintenance
what expenses are paid by who in a triple net lease
tenant: rent + property tax + insurance + common area maintenance + repairing expenses
owner: nothing :D
