Developers rapped for misusing industrial space At least two told by URA to cease use of industrial space for offices

SOME industrial property developers have been taken to task by the authorities for misusing space in industrial buildings that they developed.

At least two developers have been asked to cease the unauthorised use of industrial space as office space, The Straits Times understands.

Those rapped by the Urban Redevelopment Authority (URA) include Midview Development and Sin Soon Lee Realty. Both set up their office in a strata industrial building they developed.

Industry sources said this practice was not uncommon among small firms, including industrial developers. However, it goes against a URA "60-40" rule which effectively forbids the use of industrial units as pure offices.

Sin Soon Lee Realty set up its office in a strata industrial building it developed. It is unclear whether it has fully vacated its office in the Shun Li Industrial Complex in Sims Drive. -- ST PHOTO: JOYCE FANG

SOME industrial property developers have been taken to task by the authorities for misusing space in industrial buildings that they developed.

At least two developers have been asked to cease the unauthorised use of industrial space as office space, The Straits Times understands.

Those rapped by the Urban Redevelopment Authority (URA) include Midview Development and Sin Soon Lee Realty. Both set up their office in a strata industrial building they developed.

Industry sources said this practice was not uncommon among small firms, including industrial developers. However, it goes against a URA "60-40" rule which effectively forbids the use of industrial units as pure offices.

The rule stipulates that each strata unit in an industrial development must devote at least 60 per cent of the total floor area to core industrial activities such as manufacturing, assembly and repair workshops or warehouse and storage facilities.

The other 40 per cent may be used for supporting purposes such as ancillary offices, staff canteens and showrooms.

This is meant to ensure that industrial land is used predominantly for industrial activities.

Midview Development has already moved its office out of its 60-year leasehold light industrial development Midview Building, which is located in Bukit Batok.

The firm could not be reached for comment.

Midview Development is also the developer of 60-year leasehold Midview City where the URA last year cracked down on unauthorised use of industrial space by tenants.

It is unclear whether Sin Soon Lee Realty has fully vacated its office in the freehold light industrial building, Shun Li Industrial Complex, in Sims Drive.

Its office appeared unoccupied when The Straits Times visited it last Tuesday, but the company's signboard was still up and the room was sparsely furnished.

When The Straits Times called Sin Soon Lee Realty, a woman who said she was an accounts executive, but declined to give her name, said that the company declined to comment.

She refused to say whether the company had moved or to reveal its new location, if any.

A URA spokesman said: "In the case of unauthorised uses at Midview Building and Shun Li Industrial Complex, we commenced our enforcement actions in August last year after our investigation. We are unable to disclose further details for confidentiality reasons."

Analysts said that in many industrial buildings, particularly those zoned "Business 1" (B1) which indicates light industrial use, it was quite likely that at least 30 per cent of tenants did not meet the "60-40" rule.

Many small businesses are drawn to industrial space as industrial rents can be 30 per cent to 50 per cent cheaper than commercial space rentals.

Demand from traditional tenants of industrial buildings - genuine industrialists - may also have dropped due to the changing face of the manufacturing sector.

The growing number of firms using industrial space as offices has led to calls for a relook of the zoning requirements.

"With less of the traditional hard manufacturing taking place in Singapore, there is a need to re-examine land-use zonings, usage definitions, planning parameters, plot ratio norms and regulations in industrial buildings," Colliers International said in a recent report.

The report called on the Government to "adopt a more flexible stance" in its definition of allowable use of B1 space, to take into account firms that support the manufacturing sector but are sandwiched in between the office and industrial use classifications.

Several other industrial tenants have recently been caught flouting the industrial usage rule.

"Over the past few months, we have received feedback on the misuse of industrial spaces within a number of industrial developments... Enforcement actions have been taken against the units with such unauthorised uses," the URA spokesman said.

These projects include The Alexcier in Alexandra Road, First Centre in Serangoon North, Midview City in Sin Ming Lane, 34 Boon Leat Terrace and One Pemimpin in Pemimpin Drive.

Several units in these projects had been used for commercial uses such as offices, schools, restaurants and retail shops.

URA added that users of the units had been given a "reasonable but definitive timeframe to cease the unauthorised uses".

"Apart from the more recent cases that are still under investigation or appeal, the rest of the unauthorised uses have since ceased," she said. Users can be charged with failing to comply with the "60-40" rule, and may face a fine of up to $200,000 or up to 12 months' jail, or both.

At least two told by URA to cease use of industrial space for offices

The Straits Times - February 13, 2013 
By: Melissa Tan

Sin Soon Lee Realty set up its office in a strata industrial building it developed. It is unclear whether it has fully vacated its office in the Shun Li Industrial Complex in Sims Drive. -- ST PHOTO: JOYCE FANG

Misleading Marketing of Industrial Properties

Misleading Marketing of Industrial Properties

Fax: Tel:

1800 643 2555 (CEA)
6223 4811 (URA)

6643 2575 (CEA)
6227 4792 (URA) 

Circular No: CEA Practice Circular 3/12 URA/PB/2012/08-DCG

Date: 20 Jun 2012

Key Executive Officers of Estate Agents
Real Estate Developers’ Association of Singapore (REDAS)

Dear Sir/Madam

Misleading Marketing of Industrial Properties

MISLEADING MARKETING OF INDUSTRIAL PROPERTIES

1. The issue regarding the misuse of industrial properties for non-industrial uses has recently been highlighted in the media. Since then, the Council for Estate Agencies (CEA) and the Urban Redevelopment Authority (URA) have received several public feedback on salespersons wrongfully marketing industrial units as offices in their advertisements.
2. CEA has followed up to investigate these cases and will take action against estate agents and salespersons if they are found to have placed misleading advertisements. The URA has also initiated investigations and is taking action against property owners and unauthorised users in industrial properties.

Allowable Uses of Industrial Space

3. Industrial land is primarily safeguarded for industrial activities such as on-site manufacturing of goods, assembly and repair workshops, as well as warehouse and storage facilities. The URA zones land to support industrial activities to ensure that limited industrial land is kept affordable for industries. Independent offices and shops are not considered industrial use and are not allowed within industrial developments. These activities should be carried out on land zoned for commercial use.
4. To ensure that limited industrial land is used mainly for industrial uses, the URA requires at least 60% of the total floor area of an industrial development to be used for core industrial activities. However, URA recognises that certain non-industrial activities, such as ancillary offices1, staff canteens and showrooms are needed to support the predominant industrial uses. Hence, such supporting non-industrial uses, together with other ancillary areas (e.g. lift lobbies and circulation spaces) are allowed to occupy up to 40% of the total floor area of an industrial development.

Duties of Estate Agents and Salespersons in Respect of Advertisements

5. CEA would like to remind estate agents and salespersons to comply with the Code of Ethics and Professional Client Care (“Code of Ethics”) as set out in the First Schedule to the Estate Agents (Estate Agency Work) Regulations 2010 and CEA’s Practice Guidelines on Ethical Advertising PG 2/2011 when placing advertisements.
6. In particular, under Paragraph 12(4)(a) of the Code of Ethics, estate agents and salespersons must not place any advertisement that contains information that is inaccurate, false or misleading. Under Paragraph 12(4)(b), estate agents and salespersons must ensure that all materials accurately describe the property.
7. Paragraph 3.2 of the Practice Guidelines on Ethical Advertising also states that “All materials that advertise or promote a property must accurately describe the Property”. Estate agents and salespersons shall advertise the use of the property as approved by URA. For example, developments on land zoned Business 1 (B1) or Business 2 (B2) under URA's Master Plan 2008 are approved and allowed primarily for industrial use (e.g. manufacturing and warehousing activities). Such industrial properties should not be marketed for “business” [which may be misinterpreted as offices] or for “offices” which are not allowed in industrial buildings. Estate agents and salespersons should ensure that they are familiar with the allowable uses within B1 and B2 zones2 in order to be able to provide accurate advice to prospective buyers/lessees. They must not mislead prospective buyers/lessees with the wrong advice or provide inaccurate, false or misleading information on the allowable usage of the property.
8. By advertising and marketing industrial units in B1 or B2 zones as offices, or for any other usage which is not allowed, estate agents and salespersons would be in breach of the Code of Ethics and Practice Guidelines. CEA will not hesitate to take appropriate action against estate agents and salespersons for such breaches.
9. Estate Agents are required under Paragraph 4 of the Code of Practice for Estate Agents as set out in the Second Schedule to the Estate Agents (Estate Agency Work) Regulations 2010 to manage and supervise their salespersons to ensure that they comply with the Code of Ethics and the Practice Guidelines. Estate Agents are also required to vet all publicity and advertising materials of their salespersons prior to publication.
10. Please disseminate the above information to your salespersons and remind them that the advertisements placed by them or by assistants on their behalf in newspapers, your estate agent or the salesperson’s individual website, property portals and any other medium must not present information that is inaccurate, false or misleading.

Role of Developers

11. Developers have the responsibility to ensure that marketing materials for the industrial properties, e.g. newspapers advertisements, sales brochures or pamphlets, provide accurate information on the use of the properties to prospective buyers. When they engage estate agents and salespersons to market properties on their behalf (e.g. during property launches), they should also ensure that the appointed estate agents and salespersons convey accurate information about the property to prospective buyers. For example, developers should ensure appointed estate agents and salespersons do not mislead prospective buyers into thinking that the marketed spaces can be used for other non-approved activities, such as office uses.

Actions against Estate Agents/Salespersons and Unauthorised Uses

12. Estate agents and salespersons who infringe this Circular and/or provisions of the Code of Ethics may be subjected to disciplinary action before a Disciplinary Committee under Section 52(3) of the Estate Agents Act (Cap 95A). If found guilty, the estate agent or salesperson may be subjected to a financial penalty of a specified amount not exceeding $75,000 and/or suspension or revocation of his licence or registration.
13. The URA will continue to carry out investigations into unauthorised uses that are brought to our attention. If there is evidence of unauthorised use upon investigation, URA will give a timeframe for the unauthorised use to cease. If the unauthorised use does not cease within the stipulated timeframe, the person(s) responsible may be charged in court and if convicted, offender(s) may be fined up to $200,000 or imprisoned for a term of up to 12 months or both.
14. http://www.ura.gov.sg/uol/circulars/2012/jun/dc12-08.aspx
15. 
    

Revised Guidelines for Supporting Uses in Industrial Developments

Revised Guidelines for Supporting Uses in Industrial Developments

Date: 24 Nov 2014

 

CIRCULAR TO PROFESSIONAL INSTITUTES

 

Who should know

Developers, architects, engineers, owners and tenants

 

Effective date

With immediate effect from 24 November 2014

 

Revised Guidelines for Supporting Uses in Industrial Developments

1. The Government carefully calibrates industrial land policies to meet Singapore’s economic objectives. A key guiding principle is that industrial activities, such as manufacturing and warehousing, should take place on industrial land that has been specifically set aside for such uses.
2. The Urban Redevelopment Authority (URA), together with the Ministry of Trade and Industry (MTI) and the economic agencies, has reviewed the allowable supporting uses in industrial developments¹, and will make the following changes to better meet the needs of industrial users.

Industrial canteens

3. Under previous guidelines, staff canteens within industrial developments were restricted to serving staff working within the same building. To expand the range of food options within industrial estates, URA will now allow such canteens to serve not only the workers of the same building but also external customers. These canteens which serve primarily workers in the industrial estate will now be termed as “industrial canteens”.
4. New industrial canteens will be:
   1. Capped at a size of 700 sqm or 5% of the total proposed Gross Floor Area (GFA) per development, whichever is lower;
   2. Levied Industrial “D” rates when computing Development Charge/Differential Premium; and
   3. Approved on Temporary Permission (TP) for up to 3 years.

Showrooms 

5. Showrooms can be allowed in industrial developments under the existing guidelines. They are meant for the display² of two categories of products primarily:
   1. Products that are not typically transacted or exchanged over the counter (e.g. cars); and
   2. Products that are predominantly delivered and installed off-site (e.g. floor tiles). 
6. Under the revised guidelines, URA will only consider showroom proposals as part of a Change of Use application, after the building has obtained the Temporary Occupation Permit (TOP) and when the potential occupier or business operator for the spaces is known. If supported, showrooms will be approved on TP and levied Commercial “A” rates as is currently the case.

Selected commercial uses

7. URA will now allow selected commercial uses (i.e. clinic, banking hall/ATM, minimart and fitness centre/gym) in outlying industrial estates which are located far from existing commercial nodes, as these are basic amenities which serve the needs of industrial workers. Appendix 2 shows the outlying industrial estates where such selected commercial uses can be allowed.
8. These commercial uses will be capped at a size of 200 sqm or 10% of the total proposed GFA per development, whichever is lower. They have to be located on the first storey of the building. If supported, the uses will be approved on TP for up to three years and levied Commercial “A” rates.

Childcare centres

9. Childcare centres are important amenities at workplaces as they provide childcare support for working parents. Some childcare centres are located in industrial developments to serve parents working in the industrial estates. Under the revised guidelines, all childcare centres within industrial developments will be levied Civic & Community Institution (C&CI) “E” rates.

Implementation

10. The revised guidelines will apply with immediate effect to all new applications submitted on or after 24 November 2014. Only formal development applications (excluding Outline Applications) submitted before the effective date of 24 November 2014 which have already been granted Provisional Permission or which will result in a Provisional Permission, will not be subject to the revised guidelines³.
11. I would appreciate it if you could convey the contents of this circular to the relevant members of your organisation. If you or your members have any queries concerning this circular, please call our Development Control Group (DCG) Enquiry Line at Tel: 6223 4811 or e-mail us at ura_dcd@ura.gov.sg. For your information, past circulars and guidelines are available at our website http://www.ura.gov.sg.

Thank you.

HAN YONG HOE
GROUP DIRECTOR (DEVELOPMENT CONTROL)
for CHIEF EXECUTIVE OFFICER
URBAN REDEVELOPMENT AUTHORITY

Listen to what Tharman said. Forget about what the property analyst or expert said. Tharman is the decision maker, The rest are speculating the market in their favor

Property prices not yet at 'meaningful correction': DPM Tharman

28 Oct

By Jamie Lee leejamie@sph.com.sg

PROPERTY prices in Singapore have not seen a "meaningful correction" yet, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Tuesday.
"We've seen some correction in both private property prices and HDB resale prices over the last four to five quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said the chairman of the Monetary Authority of Singapore at the Credit Counselling Singapore's 10th anniversary luncheon.
"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

http://www.businesstimes.com.sg/real-estate/property-prices-not-yet-at-meaningful-correction-dpm-tharman

Tharman signals cooling measures not likely to be relaxed soon

Tharman said Singapore properties had not achieved a meaningful correction



SINGAPORE: Signalling that the Government is not intending to relax property cooling measures any time soon, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on Tuesday (Oct 28) there is “some distance to go in achieving a meaningful correction”.

“If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth of household incomes over the long term, which we should avoid,” said Mr Tharman, who was speaking at Credit Counselling Singapore’s 10th anniversary lunch.

He noted that there has been some correction in both private property prices and Housing and Development Board resale prices over the last four to five quarters, following the sharp run-up in recent years.

“We can never get rid of cycles in the property market, with the upswings in some years being followed by corrections. Our cooling measures cannot eliminate the cycle, but they aim to temper it,” he said. “What this means is avoiding a bubble during the upswing and allowing for a correction in prices subsequently.”

The Government had introduced several rounds of cooling measures, including the Total Debt Servicing Ratio framework and tightened loan-to-value ratios for housing loans.

Last week, National Development Minister Khaw Boon Wan said it is still not the right time to wind down cooling measures and that there is still room for prices to moderate.

Property crash not likely: Tharman

Yasmine Yahya, The Straits Times, Monday, Jul 07, 2014



The property market is unlikely to crash as the Government acted quickly to prevent a huge bubble from forming, Deputy Prime Minister Tharman Shanmugaratnam said.

But he added that the overall movements of the property cycle are determined by market players. In a wide-ranging dialogue with DBS chief executive Piyush Gupta at the annual DBS Asian Insights conference yesterday, he said the Government had taken each step to temper over-exuberance in the real estate market knowing that what it did might not be enough, but also knowing that if it did too much, it might engineer a crash.

"But we started early and we avoided a huge bubble in the market. That's why we won't see a crash," said Mr Tharman, who is also Finance Minister. "But I think a further correction will not be unexpected."

He added: "I don't think the cycle is over but the market determines the cycle. The Government has put in place rules, stamp duties and restrictions... but market players will determine where the cycle goes."

In the hour-long dialogue, which touched on subjects ranging from Mr Tharman's outlook on the global economy to his favourite things about Singapore - the multi-racial society, the food and the weather - Mr Tharman also expressed his optimism for the Chinese economy.

"Certainly amongst large economies it has the most complex economic challenges. It also has, in my opinion at least, the most capable economics team amongst the larger economies."

China faces many challenges, he noted. As the Chinese leaders undertake the major task of transforming the economy into a market-driven one, Chinese leaders also have to contend with "legacy" issues. These include shadow banking, over-investment and high levels of credit that have built up in the wake of the 2008 global financial crisis. Nonetheless, he said China's government is "closer to ideal than anything they've had in a long while, both in terms of capability as well as the ability to make decisions".

Mr Tharman was also optimistic about India's prospects. The first thing new Prime Minister Narendra Modi has focused on is "clarity and getting things done", he noted. "Mr Modi is quite focused on streamlining approvals for projects, especially infrastructural projects, on reducing the number of agencies you need to go to at the federal and state level, and just getting things done." This in itself is a significant improvement, Mr Tharman said.

Touching on productivity, Mr Tharman encouraged consumers to do more themselves, giving an example of how hotels in Sweden leave coffee pots on the table for customers to pour themselves.

"It's the quality of the coffee that counts," he said to laughter and applause.

yasminey@sph.com.sg
This article was first published on July 5, 2014.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

http://business.asiaone.com/news/property-crash-not-likely-tharman

Property crash unlikely, measures in place: Tharman

July 5, 2014 by Andrew Loh



Property prices in Singapore may fall further, said Deputy Prime Minister Tharman Shanmugaratnam on Friday.

“I don’t think the (property) cycle is over,” he said to a question at the DBS Asian Insights Conference.

He said it is unlikely that the market will see a crash as the Government has introduced cooling measures early to quell any potential housing bubble.

Mr Tharman’s remarks come on the back of calls by some, including the chairman of property developer City Developments (CDL), for the government to review some of the cooling measures it has put in place.

On Wednesday, CDL chairman Kwek Leng Beng said, “The overall picture seems to suggest that it may be timely now for the Government to take another look at the cooling measures introduced and make adjustments accordingly.”

A day earlier, the Urban Redevelopment Authority (URA) released flash estimates which saw private residential prices in Singapore fell 1.1 per cent to 209.3 points in the three months ended June 30. This followed a 1.3 per cent decline in the previous three-month period.

Prices have been falling for 3 straight quarters since last year.

Mr Kwek said that because of the cooling measures which the government has introduced since 2009, “foreigners were choosing to plough their investment dollars into countries like Britain, Australia and the US over Singapore, while Singaporeans have been investing abroad.”

“We are losing these investments to other countries even though these foreign properties have a higher risk profile,” Mr Kwek told The Straits Times. “It is unlikely these investment dollars will return to Singapore.”

However, the government seems to hold to its position that the measures are still necessary.
“The market determines the cycle and the Government has put in place rules and stamp duties,” Mr Tharman said on Friday. “We’ve also pumped in a fair bit of supply into the market. But market players will determine where the cycle goes.”

Dismissing fears that the market will crash, Mr Tharman, who is also the Finance Minister and chairman of the Monetary Authority of Singapore, said, “[I] don’t think we’ll see a crash, because we moved early enough. And we moved each step of the game, knowing full well that what we do may not be enough, but if too much we might engineer a crash.”

“So, we started early, moved step by step and avoided a huge bubble in the market. That’s why we won’t see a crash. But I think further correction will not be unexpected,” he added.

Mr Tharman’s remarks echo that of the Ministry of National Development on Monday.

“It is still too early to relax the property market cooling measures,” said a ministry spokesman. “If the measures are removed prematurely, we could see a sharp increase in demand and housing prices.”

Read also: “CDL chairman again calls on gov’t to ease property curbs“.

http://www.theonlinecitizen.com/2014/07/property-crash-unlikely-measures-in-place-tharman/

URA tell Developers to refrain from using SOHO as marketing gimmick

Daniel Choy is a professional Commercial and Industrial Property Trainer and Coach. I wrote the article to Forum Page because I felt that the Developers are misleading the Public. It was such a impressively argued article that URA finally decided to stop developers from using the term SOHO to mislead the public. If you are interested to be train as a smart Commercial and Industrial Property investors or agents, do write to danielchoytl@gmail.com to indicate your interest so that I can include you in the next training schedule.

Letter to Straits Times FORUM PAGE by Daniel Choy Tuck Leong

 

Soho marketing tactics confuse buyers

 

03 Apr 2013, Straits Times

 

I READ on the Urban Redevelopment Authority (URA) website that residential home owners or tenants who want to conduct selected small-scale businesses from their homes can do so under the existing Home Office Scheme.

Because of this, developers are creatively marketing their projects for small office, home office (Soho) use, even though the URA does not recognise Soho as a planning term and does not specifically approve a development for Soho use.

This confuses potential buyers. Why does the URA allow developers to use such marketing tactics to fetch higher prices and boost sales?

What about buildings zoned for commercial use, sitting on commercial land, and being marketed as Soho? Can a commercial building that is used for office purposes be approved for residential use under the Home Office Scheme or other schemes?

What about commercial buildings in a white zone, where some blocks are used for fully commercial purposes while others are used as Soho? Buyers are confused on whether to purchase units under the residential or commercial category.

With the introduction of the additional buyer's stamp duty and lower loan-to-value ratios for residential units, buyers would, of course, prefer to purchase units under the commercial category.

Developers should not be allowed to market their projects as Soho and confuse buyers. If a project is meant for solely residential or commercial purposes, this should be made clear to buyers.

Daniel Choy Tuck Leong

http://www.straitstimes.com/premium/forum-letters/story/soho-marketing-tactics-confuse-buyers-20130403

http://www.ura.gov.sg/uol/media-room/forum-replies/2013/apr/forum13-05.aspx

URA's Reply

 

Developers must spell out allowable use of properties

 

06 Apr 2013, Straits Times

 

WE AGREE with Mr Daniel Choy Tuck Leong ("Soho marketing tactics confuse buyers", Wednesday) that potential buyers should be made aware of the limitations on a development's allowable use.

Mr Choy correctly pointed out that small office, home office (Soho) is a marketing term used by property agents and developers. It does not refer to any specific development type that is allowable or has been approved by the Urban Redevelopment Authority (URA).

Developments that have been marketed as Soho are approved as either office or residential developments.

Without explicit prior planning permission from the URA, any development that has been approved for office use cannot be converted to residential use, and vice versa.

However, if an owner of a residential property wishes to conduct some small-scale business within his home, he can apply for permission by lodging a notification under the Home Office Scheme.

Introduced in June 2003, the scheme allows home owners, tenants or authorised occupiers of residential properties and flats to conduct small-scale businesses within their homes, provided they do not cause any inconvenience to neighbouring residents, and the proposed use is considered a permitted use.

To minimise disturbances, only up to two non-residents can be engaged and work in the premises for their businesses. Details on the Home Office Scheme can be found at edanet.ura.gov.sg/dcd/homeoffice/HOMainPage/HOindex.jspThe allowable use for each property is clearly spelt out in the option to purchase, and in the sale and purchase agreement.

Developers also have to ensure that the marketing materials for their properties, for example, newspaper advertisements, and sales brochures or pamphlets, provide accurate information to prospective buyers on the allowable use of the properties.

Prospective buyers who come across misleading marketing collaterals can report the matter to the URA, which will then investigate and take action against the developer if there is misconduct or misrepresentation.

Prospective home buyers can also refer to the Home Buyers' Guide (www.ura.gov.sg/lad/HBG/index.htm) on the URA's website for more information on the sale and purchase of uncompleted residential properties.

Han Yong Hoe
Group Director (Development Control)
Urban Redevelopment Authority
http://www.ura.gov.sg/uol/media-room/forum-replies/2013/apr/forum13-05.aspx

http://www.straitstimes.com/st/print/972060

---

 Circular from URA because of Daniel Choy's feedback

Usage of the Term "Small Office Home Office" - From URA

Effective date

With effect from 25 November 2013

Usage Of The Term “Small Office Home Office”

 

Background 

1. We have received feedback on the use of the term “Small office home office” (SOHO) in newspaper advertisements, sales brochures and pamphlets.  In particular, purchasers may be under the impression that their property can be used concurrently or interchangeably as a home and an office.  This circular will provide greater clarity to developers on the use of the “SOHO” term, when marketing their projects.

SOHO is a marketing term

2. SOHO is a marketing term used by developers and estate agents. It does not refer to any specific use or type of development that is allowable or approved by the Competent Authority under the Planning Act.  The planning permission for a unit marketed as a SOHO unit is for either residential or office use but not for both uses.

Residential properties and the Home-Office Scheme

3. Residential units are intended for long-term residential stay, and cannot be converted to other uses, like commercial uses, that could cause disturbances and inconveniences to residents. However, under the Home-Office Scheme, owners of residential units can use their homes to conduct small-scale businesses, provided they do not cause disamenity to other residents. To do so, the owner must register for the home-office use under the Home Office Scheme (see http://www.ura.gov.sg/uol/home-office/Register/Guidelines/about.aspx for details). Only small-scale businesses that comply with the planning guidelines applicable to home-offices (e.g. not hiring more than two non-resident employees) are permitted within residential units. Other commercial businesses or uses that do not meet the guidelines are not allowed.
4. To provide more clarity for purchasers of residential properties, we strongly urge developers who use the term “SOHO” in any of their advertisements to highlight the approved use of the unit to prospective purchasers. Developers should let prospective purchasers know the restrictions on its use by inserting the following pre-approved clause in the Sale and Purchase Agreement and disclosing the contents of this clause to intending purchasers before the acceptance of the booking fee:
   
   “Approved Use of the Unit
   The Unit is approved for use for residential purpose under the Planning Act.  The purchaser may not use the Unit for any other purpose unless permitted by the Competent Authority or authorised under the Planning Act.  The Purchaser is authorised to use the Unit as a home-office for a small scale business only if the conditions for the change to home-office use as set out in the Planning (Development of Land Authorisation) Notification e.g. lodging the required registration form for the change in use with the Competent Authority, are complied with.

Office properties are not allowed for residential use

5. Office properties are to be used according to their approved use (i.e. as offices), and are not meant for residential use. Hence, developers should refrain from using the term “SOHO” for office developments in any of their advertisements and should not make any representations to intending purchasers that the office units may be used for residential uses.

Marketing collaterals

6. Developers are required to ensure that representations made to prospective purchasers, including but not limited to those in advertisements (e.g. in newspapers or websites) and sales brochures for their projects, are accurate.  The Controller will not hesitate to take action if developers are found to have contravened any rule.
7. If developers engage estate agents to assist them in marketing their properties, they should provide estate agents with accurate information about the allowable use of the development so that estate agents would not misrepresent any information to the prospective purchasers.
8. I would appreciate it if you could convey the contents of this circular to the relevant members of your organisation. If you or your members have any queries concerning this circular, please do not hesitate to call our hotline at Tel: 6329 3512 or e-mail us at ura_coh_registry@ura.gov.sg. We will be pleased to answer queries on this subject matter. For your information, our past circulars to the professional institutes are available from our website http://www.ura.gov.sg.

Thank you.

SIN LYE CHONG
CONTROLLER OF HOUSING
URBAN REDEVELOPMENT AUTHORITY

 

http://www.ura.gov.sg/uol/circulars/2013/nov/coh13-001.aspx

 

Be clear on Soho, URA tells developers

Units marketed as such may be a home or an office - but not both

The Straits Times - November 26, 2013
By: Janice Heng

 

 

The Cape (above) is one of Far East Organization's Soho developments. The term Soho usually refers either to homes with design elements such as high ceilings aimed at buyers who may work from home, or to small offices. But the URA says ''Soho'' does not signify any official planning status. -- PHOTO: FAR EAST ORGANIZATION

 

DEVELOPERS here have been warned to be careful when marketing properties as "small office home office", or Soho units.

 

They should make it clear to buyers that the term Soho does not refer to any official planning status, said the Urban Redevelopment Authority (URA) in a circular yesterday.

 

Units marketed as Soho have planning permission for either residential or office use, but not for both, the URA said.

It issued the circular to professional institutes, including the Real Estate Developers' Association of Singapore, after receiving feedback on the issue.

 

When "Soho" is used in marketing, it usually refers either to small offices, or homes with design elements such as high ceilings aimed at buyers who may work from home.

 

It is more often used to refer to residential units rather than office ones, said Mr Ku Swee Yong, chief executive of real estate agency Century21.

 

But as for what exactly a Soho residential unit allows, "the market has been confused for a while already", he said.

Many employees may legitimately do some work from home. What is not usually allowed is running a business out of a home.

 

Small-scale businesses can be run out of homes only if owners register for the "home-office scheme".

The business must meet guidelines such as not hiring more than two foreign employees.

The URA strongly urged developers to insert a clause stating the approved use of the property in the Sale and Purchase Agreement.

 

As for all office properties - even if marketed as Soho units - they are not meant for residential use.

Developers should not give a different impression, and "should refrain from using the term 'Soho' for office developments in any of their advertisements".

 

Far East Organization said it is not marketing any commercial developments under its dedicated 'SO/HO' brand at the moment.

 

"We support the greater clarity on the use of the 'SOHO' term as set out in the latest circular by the URA," said executive director of property services Chng Kiong Huat.

 

He added that Far East has "made it a point to highlight" that buyers must comply with regulations if they want to use their residential unit as a home-office.

 

A call for such clarity was made in April when Mr Daniel Choy wrote to The Straits Times' Forum page, saying the term 'Soho' confuses potential buyers.

 

His job as a real estate agent is made harder by such confusion, he told The Straits Times yesterday.

He would like developers to be barred from using the term.

 

Mr Ku sees the circular as aiming "to make our developers a little more disciplined" and raise awareness among agents. But he doubts it will clear the air: "I think the confusion will still go on because there aren't any real punitive measures."

The URA also said developers should "provide estate agents with accurate information".

 

Regardless of how projects are marketed, agents should be clear on the facts, said Mr Jeffhery Foo, president of the Institute of Estate Agents, Singapore: "There is an onus on us to make such clarifications upfront."

 

http://www.straitstimes.com/breaking-news/singapore/story/be-clear-units-marked-soho-ura-tells-developers-20131126

 

http://www.stproperty.sg/articles-property/singapore-property-news/be-clear-on-soho-ura-tells-developers/a/144717

 

 

 

Budget 2015 - Budget that looks forward and corrects a policy course

Tuesday, Feb 24, 2015

THE STRAITS TIMES

TOP OF THE NEWS

Budget that looks forward and corrects a policy course

Published on Feb 24, 2015 2:40 AM

                            

By Lydia Lim, Associate Opinion Editor

A MEASURE of any government Budget is the extent to which it positions a nation for the future, rather than merely plugging gaps in the present or, worse, making up for past mistakes. The two clearly future-focused parts of Budget 2015 are SkillsFuture, to help workers gain expertise and mastery, and new moves to spur small and medium-sized enterprises (SMEs) to innovate and internationalise.

The same cannot be said for the Central Provident Fund changes. Although welcome, they effectively restore contribution rates for older workers and salary ceilings to what they were before controversial cuts in 2003 that have eaten into people's retirement savings. But first, SkillsFuture. It "marks a major new phase of investment in our people", said Deputy Prime Minister Tharman Shanmugaratnam. It is a vision to transform Singapore from "a hierarchy of grades earned early in life" to a "meritocracy of skills". And it puts the skilled worker front and centre, which is apt for a nation whose only resource has always been its people.

Mr Tharman shared an anecdote to show how far Singapore workers have come, a story centred on Jalan Tukang in Jurong, so named as tukang is Malay for skilled worker. It used to be home to the Swan Socks factory, founded with Japanese investment, opened by former deputy prime minister Goh Keng Swee in 1964 and one of the first to offer significant employment for women. Today, Swan Socks is no more. In its place are Tukang Innovation Park and MedTech One, a dedicated facility for the fast-growing medical technology industry.

Another big change is in wages. Since the 1960s, the average pay of a lower-income worker has risen by more than five times, and that of a median-income worker by six. Where Singapore used to lag behind other Asian economies, its median wage is now higher than that of Hong Kong, South Korea and Taiwan and only 10 per cent lower than that in Japan.

But workers here and worldwide now face a brave new world where jobs are constantly reshaped by technology, and "no one can honestly tell what they will be doing a decade or two after leaving school". Singapore workers must be prepared to learn and adapt at every stage of their lives.

The Government will help them with deposits and regular top-ups to their SkillsFuture Credit accounts, starting with $500 for every Singaporean aged 25 and older. The aim is to enable "every individual to decide on his or her own learning journey: when to go for fresh infusions of skills or knowledge, and whether it should be in specialised professional training, acquiring soft skills or developing a new interest", Mr Tharman said.

Also in the pipeline are professional career counselling and internships for students, enhanced education and training subsidies for mid-career workers, and SkillsFuture Study Awards and Fellowships. They form an exciting vision to empower workers to chart their own way forward. The estimated cost: $1 billion a year on continuing education and training from now until 2020, up from $600 million a year for the last five years.

Success, however, hinges on how well the plans are executed, and many questions hang over how the vision will be translated into reality. Singaporeans, too, will have to step up to the challenge of lifelong learning. The efforts of workers have to be complemented by those of enterprises. The bar for them has been raised, from value adding - which may have earned them a good living in the past - to the next frontier of value creating.

The Government will stay the course on economic restructuring, even though its productivity drive has so far produced dismal results in non-export sectors. Mr Tharman appealed for yet more time, saying "the business transformations that underpin a major shift in productivity will take time, and it also takes time for the market to restructure, with adopters of new ideas and technologies gaining share at the expense of those who stand still". Budget 2015 sharpens support for SMEs that innovate, by providing grants, R&D investments and a pilot venture debt risk-sharing programme to help high-growth enterprises secure financing. To succeed, these will have to yield better results than previous rounds of productivity incentives.

On the second big theme of strengthening social security, CPF changes took centre stage. The big criticism here is that several changes announced yesterday simply reverse what some consider to be ill-judged policy decisions of the past. These include significant cuts to contribution rates of workers aged 50 and above - which many resented and found unfair - and the lowering of the CPF salary ceiling from $6,000 to $4,500. Both took place in 2003, in the wake of the Sept 11, 2001 attacks and the Sars outbreak, which caused unemployment to spike. What accounts for this course correction?

Well, the employment rate among older workers has risen, as Mr Tharman noted, from 64.4 per cent in June 2004 to 71.4 per cent in June last year, an improvement he linked to schemes such as the Special Employment Credit introduced post-2003. Still, as any financial planner knows, time is of the essence in building up one's nest egg and the CPF cuts cost thousands of workers over a decade in lost savings.

Yesterday's announcement that the CPF Board will pay an extra 1 per cent on the first $30,000 in the accounts of members aged 55 and older, will be a significant boost to those with lower balances. Lower-income seniors with insufficient CPF savings will also benefit from a new Silver Support Bonus that tops up their retirement income every quarter. In this age of austerity, what is worth celebrating is that Singapore still has enough in its coffers to make big investments for the future - including $26 billion on public transport infrastructure over the next five years - and still balance its Budget.

But spending has outpaced revenue and continues to rise. The country would be in deficit if not for the returns on past savings known as the reserves. Overall spending is projected to hit 19 per cent to 19.5 per cent of gross domestic product on average over the next five years, 1 per cent more than the revenues of today.

To bolster fiscal resources, the returns from Temasek Holdings' investments will be included in the Net Investment Returns framework, and the top personal income tax rate will rise from 2017. Both these revenue measures together are expected to provide for increased spending needs "till the end of this decade". The need to spend and invest judiciously will grow in the future.

lydia@sph.com.sg

BUDGET 2015 Foreign worker levy hike deferred for a year Additional adjustments made for manufacturing, construction firms

Wednesday, Feb 25, 2015

THE STRAITS TIMES

TOP NEWS

Foreign worker levy hike deferred for a year

Additional adjustments made for manufacturing, construction firms

Published on Feb 24, 2015 2:45 AM

By Chia Yan Min

LEVY hikes for firms employing foreign workers have been deferred for 12 months.

The move will give companies more breathing space as they battle a tight labour market and rising wage costs.

The higher levies for S Pass and work permit holders in all sectors were to kick in from July this year but will now be deferred until July next year, with additional adjustments for manufacturing and construction firms.

Levy rates for work permit holders in manufacturing firms will be kept unchanged at current levels until June 2017.

There has been no increase in the number of work permit holders in manufacturing over the past year and the sector has been making good progress on productivity, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam yesterday.

In another move, the levy rate for higher-skilled workers hired outside of a construction firm's man-year entitlement quotas will be lowered from July.

The man-year entitlement refers to the total number of foreign construction workers allocated to a contractor for a specific development. Construction firms are allocated a number of man-years required to complete a project and the number of foreign workers they can employ.

Levies for basic-skilled construction workers will be raised in July next year and again in 2017, while other levy rates for the sector will remain at current levels.

The move aims to encourage construction companies to upgrade workers and retain more productive, skilled employees.

These tweaks will give companies, especially small and medium-sized enterprises, more time to adapt to "the new normal of a permanently tight labour market, where it is both difficult to find Singaporean employees, and foreign workers are no longer an easy solution", said Mr Tharman.

But he stressed that while the Government is adjusting the pace of its foreign worker measures, it is "not changing direction".

"It remains crucial for Singapore that we restructure towards reducing our reliance on manpower, and find new and more innovative ways to do business."

The Singapore Manufacturing Federation welcomed the freeze in foreign worker levies. "This will provide more time for (manufacturers) to explore ways to transform through innovation."

Mr Leonard See, director of interior construction and specialised carpentry firm A&F Concepts, said the levy changes do not give him the incentive to send staff for training as doing so can be "risky" for small companies.

The firm has about 10 foreign workers, all classified as basic- skilled.

"To improve productivity, we keep our operations lean and emphasise on-the-job training and mentorship," said Mr See.

"There are other avenues to lower levies - if workers stay with me for a long time, I can move them up to a higher pay scale and also pay lower levies."

chiaym@sph.com.sg

BUDGET 2015 - Lower childcare fees for parents under new scheme

Wednesday, Feb 24, 2015

THE STRAITS TIMES

TOP NEWS

BUDGET 2015

Lower childcare fees for parents under new scheme

Published on Feb 24, 2015 2:41 AM

By Kok Xing Hui

PARENTS whose children are in childcare centres stand to benefit from lower fees under a new scheme.

While details are still scant, the new partner operator scheme will have childcare operators commit to keeping fees affordable.

A median-income household could pay around $100 less in fees a month, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam. This example is based on a household paying $500 a month in childcare fees after a $400 subsidy.

The Straits Times understands that one aspect of the scheme is to get small operators to share resources so as to keep costs down, as Social and Family Development Minister Chan Chun Sing had said in January.

Mrs Liaw-Tan Xinhui, director of Ameba Schoolhouse, which has one centre, said operators might not be willing to share resources such as teachers or curriculum as these are their selling points.

But she said she is willing to join other pre-schools in organising events or share back-end resources such as administrators.

Account manager Ong Boon Hua, 33, whose four-year-old son attends NurtureStars @ Safra Mount Faber, said he hopes the pre-school will join the partner operator scheme.

He pays about $350 in childcare fees after subsidies, instead of the regular $1,000, and hopes to pay even less. The money he saves on childcare could then go towards the care of his parents, who live with him in a three-generation household of seven.

The new scheme is meant to complement the current anchor operator programme, where operators get government grants and rental subsidies in exchange for providing affordable and quality pre-school education.

With the two schemes, the Government aims to have about half of pre-school children in Singapore benefit from more affordable and quality pre-schools by 2020, said Mr Tharman. The Government will spend $250 million on enhanced support for both schemes over the next five years.

Families will also get help in paying for pre-school fees with a top-up to the Child Development Accounts of Singaporean children aged six and below this year.

Most children will receive $600, while those with an annual home value of more than $13,000 will receive $300.

The top-up will cost $126 million and benefit 230,000 children.

For a middle-income household, the top-up of $600 can cover more than a month of childcare costs after subsidies, said Mr Tharman.

kxinghui@sph.com.sg