singapore real estate investment & leasing guide

Singapore Real Estate Investment & Leasing Guide

Accelerating success.

ContentsGeneral Overview

of Singapore

Singapore Market Overview

Sales and Purchase of Real

Estate

Leasing Practices

4

Socio-Economic Information

Financial System - Role of MAS

Foreign Exchange Control4

3

8

10

7

15

29

13

30

Land System – Ownership and Tenure

Restrictions on Foreign Ownership

Acquisition and Development of Residential Land

Regulatory Framework

Taxation

Units of Measurement

Property Yields

Option to Purchase

Stamp Duty

Financing

34

40

33

45

2013 Edition

1 General Overview of Singapore

General Overview of Singaporea

cb

Socio-economic informationfinancial SyStem – role of maSforeign exchange control

General Overview of Singapore 43 General Overview of Singapore

Socio-economic informationa

715.8(as of 2012)

LAnd AreA (sq km)

5,312.4(as of 2012)

totALpopuLAtion

(‘000)

7,422popuLAtion

density (per sq km)

s$singapore

dollarsCurrenCy

345,560.50(for year 2012)

Gdp At Current mArket priCes (s$ miLLion)

65,047.91per CApitA Gdp

(s$ ‘000)

financial SyStem – role of maS

The Monetary Authority of Singapore (MAS) is Singapore’s Central Bank, which promotes sustained non-inflationary economic growth through appropriate monetary policy formulation and close macroeconomic surveillance of emerging trends and potential vulnerabilities.

foreign exchange control

There is no foreign exchange control on the movement of capital and direct investment in and out of Singapore.

b c

maScentral bankof Singapore

promotes sustained

non-inflationary economic growth

appropriate monetary policy

formulation

close macroeconomic

surveillance


SingaporeMarket Overviewa

d

c

fg

b

e

land SyStem – ownerShip and tenure

regulatory framework

reStrictionS on foreign ownerShip

taxation

acquiSition and development of reSidential land

unitS of meaSurementproperty yieldS

Singapore Market Overview 87 Singapore Market Overview

land SyStem – ownerShip and tenure

Two main types of land tenure granted are: a

•freehold title including Grant in Fee simple and statutory Land Grant.

•leasehold title including 999 years and 99 years, which are the most common term.

A foreign person is defined as someone who is not any of the following:

• Singapore citizen

• Singapore company

• Singapore limited liability partnership

• Singapore society

Any foreign person including Singapore Permanent Resident (SPR) must obtain approval from the Minister of Law through the Land Dealings (Approval) Unit (LDU) to buy restricted properties.

b

•60, 30, 22 and 15-year leasehold titles are also issued for various industrial, commercial and recreational uses.

Generally, the ownership of land and buildings are not separate.

reStrictionS on foreign ownerShip

Restrictions on foreign ownership of private residential property in Singapore are governed by the Residential Property Act, under which restricted residential property includes:

• Vacant residential land.

• Landed property [i.e. detached house, semi-detached house, terrace house (including linked house or townhouse)].

• Landed property in strata-titled developments which are not approved condominium developments under the Planning Act.


More information on foreign ownership of restricted properties can be found at

Notwithstanding the above, foreign persons or entities may purchase flats or units in a condominium building although purchase of all units in a development is not permitted.

The application will be evaluated on a case-by-case basis. If the approval for purchase is to be granted by the LDU, the said property has to be owner-occupied.

Sentosa Cove A 117-hectare unique waterfront residential enclave located on an offshore island integrated with yachting and berthing facility. It is the only part of Singapore that does not restrict foreign ownership on landed residential properties. Nonetheless, prospective buyers will still need to seek approval from the LDU.

acquiSition and development of reSidential land

This is a requirement under the Housing Developer’s (Control and Licensing) Act.

Licensed housing developers are also subject to the rules made under the Act, namely the Housing Developers Rules and the Housing Developers (Project Account) Rules. These rules provide a framework for fair market practices in the sale of uncompleted private residential properties by licensed housing developers.

Foreign individuals or companies, as stipulated under the Residential Property Act, must obtain in-principle approval from the LDU prior to land tendering and submission, and upon success of their tender bids, must seek formal approval from the LDU.

c

Any developer who intends to carry out a project of more than four units of housing accommodation is

required to obtain a housing developer’s

licence from the Controller of Housing before the

commencement of construction works.

http://www.sla.gov.sg/htm/ser/ser0306.htm


Foreign developers are also banned from reselling land. Effective from 12 January 2013, for residential sites released under the Government Land Sales Programme, the foreign developer will need to pay an Additional Buyer’s Stamp Duty (with interest) if the following conditions are not met:

• Complete development and sale of all residential units in the development within five years* of the date of Contract or Agreement to purchase the site.

• Produce the Qualifying Certificate where relevant, and housing developer licence within two years^ of the date of Contract or Agreement.

• Produce proof of piling and foundation works and any demolition

work within two years^ of the date of Contract or Agreement.

• Produce proof of disposal of all residential units in the development within five years*

of the date of Contract or Agreement.

Under the Residential Property Act, housing developers whose shareholders and directors are not all Singaporean are required to obtain a qualifying certificate (QC) from the Controller of Residential Property (CRP) before they are permitted to purchase residential land for development. This is imposed to control foreign ownership of land in the State.

A banker’s guarantee of an amount equivalent to 10% of

the land price is needed to obtain the QC and this may be forfeited if the developer fails to fulfil the QC’s conditions. Under the Act, foreign developers are required to complete building on the land acquired within the prescribed period and sell all project units within two years of obtaining the temporary occupation permit. They are not allowed to rent out unsold units.

Developers whose shareholders and directors are not all Singaporeans need a qualifying certificate (QC) to

purchase residential land for development * In cases where a developer has purchased residential land through a collective sale under the Land Titles (Strata) Act on or after 1 July 2012, five years will commence on the date of the collective sale order granted under the Act.

^ in cases where a developer has purchased residential land through a collective sale under the Land titles (strata) Act on or after 1 July 2012, two years will commence on the date of the collective sale order granted under the Act.


regulatory framework

regulatory AuthoritiesThe Urban Redevelopment Authority (URA) is Singapore’s land-use planning and conservation authority. Written permission is required when any material change in building or land is to be made, such as change of use, building erection, etc. with the exception of minor works.

The Building and Construction Authority (BCA) is a government agency that is responsible for the built environment in Singapore, including buildings, structures and infrastructure. The BCA also issues approval of structural plans, Temporary Occupation Permits (TOP) and Certificates of Statutory Completion (CSC).

Land use planningThe permissible land use and density for developments in Singapore can be found in the Master Plan which is a statutory land use plan, guiding Singapore’s development over the next 10 to 15 years. The Master Plan 2008 is the current Master Plan.

development Charge (dC) A DC is levied on the enhancement in land value resulting from the State approving a higher value development proposal, if the development ceiling exceeds the development baseline.

dThe development ceiling is the value of the development proposed for a site and allowed by URA.

With effect from 1 January 2008, development baseline

is defined as the value derived from the use and intensity of the approved

development on the land or use and intensity allowed in

Master Plan 2003.

Revision of DC rates is carried out bi-annually in March and September.

regulatory authoritieS

ura + bca

Responsible for the built environment in Singapore

Land-use planning and conservation

authority


taxationChargeable

income rate (%) Gross tax payable (s$)

First s$20,000 0.0 0

next s$10,000 2.0 200

First s$30,000 - 200

next s$10,000 3.5 350

First s$40,000 - 550

next s$40,000 7.0 2,800

First s$80,000 - 3,350

next s$40,000 11.5 4,600

First s$120,000 - 7,950

next s$40,000 15.0 6,000

First s$160,000 - 13,950

next s$40,000 17.0 6,800

First s$200,000 - 20,750

next s$120,000 18.0 21,600

First s$320,000 - 42,350

Above s$320,000 20.0

eDifferential Premium (DP) The Differential Premium DP is a payment charged for lifting the title restriction when there is a change of use and/or intensity.

The determination of DP is based on the published table of DC rates. In addition, where tenure of land is leasehold, the DC rates will be adjusted to reflect the residual tenure of the land. A leasehold table, which expresses the value of the residual tenure as a percentage of freehold value, will be applied to the DC rates to determine the DP payable.

individual income taxOne will be regarded as a tax resident for a particular Year of Assessment (YA) if he/she fulfils one of the following:• Singaporean• Singapore Permanent

Resident who has established a permanent home in Singapore.

• Foreigner who stayed or worked for 183 days in Singapore or more in the previous year (excludes director of a company).

Tax rates for resident individuals for YA 2012 onwards:

individual income tax

Capital Gains tax

Withholding tax

Corporate tax

Goods and services tax

double taxation

15 Singapore Market Overview

property tax

types

source: inland revenue Authority of singapore (irAs)

b


Capital Gains taxCapital Gains Tax is not applicable in Singapore. However, if an individual is deemed to be trading in properties, the gains derived from the sale of property in Singapore are considerable as taxable income.

Withholding taxWithholding Tax is applicable when a person is not a tax resident of Singapore and is deemed to be involved in property trading in Singapore. The buyer or the buyer’s lawyer is required to withhold 15% of the sale price to account for the withholding tax and the amount withheld has to be paid to the Inland Revenue Authority of Singapore (IRAS).

Corporate taxGenerally, Corporate Tax is imposed on income of any company accrued in or derived from Singapore and income received in Singapore from outside sources.

The current corporate income tax rate is 17% since YA 2010.

60 and above

below60

tax rebate Capped at

30.0% s$1,500

tax rebate Capped at

50.0% s$1,500

source: irAs

Age as of 31 december 2012

Employment income for non-resident individuals who are foreigners and have stayed or worked for 183 days or less in Singapore in the previous year are taxed at 15% or the resident rate, whichever is the higher tax.

For YA 2013, all tax residents will receive an income tax rebate of up to S$1,500, depending on the age of the resident individual. Details as follows:

17 Singapore Market Overview


• A company whose principal activity is that of investment holding and derives only passive incomes such as dividend and interest income.

• A company whose principal activity is that of developing properties for sale, for investment, or for both investment and sale.

tAx exemption sCheme For neW stArt-up CompAnies

The tax exemption scheme for new start-up companies was introduced in YA 2005 to support entrepreneurship and help local enterprises grow. Under this scheme, a newly incorporated company that meets the qualifying conditions can claim a full tax exemption on the first S$100,000 of normal chargeable income,

which is income to be taxed at the prevailing corporate tax rate (excluding Singapore franked dividends) for each of its first three consecutive YAs. From YA 2008, a further 50% exemption is given on the next S$200,000 of the normal chargeable income for each of the first three consecutive YAs.

As announced in Budget 2013, the tax exemption scheme does not apply to the following companies incorporated after 25 February 2013:

Additionally, some companies are entitled to the following tax rebates, exemptions or incentives for YA 2013:

CorporAte inCome tAx (Cit) rebAte For yA 2013 to 2015

As announced in Budget 2013, all companies including Registered Business Trusts, that are not tax residents in Singapore and companies that receive income taxed at a concessionary tax rate are eligible for a 30% Corporate Income Tax (CIT) Rebate of up to S$30,000 per YA for YA 2013, 2014 and 2015.

i ii


The tax exemption for new start-up companies on chargeable income of up to S$300,000 is as follows:

exempt Amount

First s$10,000 @75% s$7,500

next s$290,000 @50% s$145,000

total s$300,000 s$152,500

exempt Amount

First s$100,000 @100% s$100,000

next s$200,000 @50% s$100,000

total s$300,000 s$200,000

• have no more than 20 shareholders throughout the basis period for that YA when:- all of the shareholders

are individuals beneficially and directly

holding the shares in their own names; or- at least one shareholder

is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.

These companies will be given partial tax exemption.

Moreover, in order for new start-up companies to qualify for the tax exemption, a company that is not excluded from the Tax Exemption scheme must:

• be incorporated in Singapore (including a company limited

by a guarantee).

• be a tax resident in Singapore for that YA.

pArtiAL tAx exemption For CompAnies

Since YA 2008, companies are given a partial tax exemption on normal chargeable income (excluding Singapore franked dividends) of up to S$300,000 as follows:

iii

source: irAssource: irAs


double taxationSingapore has Avoidance of Double Taxation Agreements with several countries, which serves to prevent double taxation of income earned in one country by a resident of the other country.

A complete listing of Avoidance of Double Taxation Agreements concluded by Singapore since 1965 can be found at

Properties that do not fall within the definition of residential properties are considered non-residential properties, sale and lease of which are subject to GST.

In addition, a GST concession is available for Singapore Real Estate Investment Trusts (S-REITs) and qualifying Singapore Registered Business Trusts (S-RBTs) listed on the Singapore Exchange to claim GST on expenses incurred for their business and their Special Purpose Vehicles. The GST concession applies regardless of whether they are GST registered S-REIT or S-RBT.

• Vacant land that is zoned “Residential” or “Rural Centre and Settlement” in the Master Plan which will be used for residential development;or

• Residential dwellings and properties, such as serviced apartments, which provide medium- to long-term accommodation as alternatives to residential dwellings.

Residential properties that do not attract GST include:

GST

www.iras.gov.sg

Goods and service tax (Gst)GST is levied on domestic consumption of goods and services which are produced by GST registered businesses or imported into Singapore. The current GST is at the standard rate of 7%, unless the supplies of goods and services are zero-rated.

The sale and lease of residential properties in Singapore as well as financial services are tax-exempt items.


• For vacant land and development sites: AV is assessed at 5% of the estimated freehold market value of the land.

• For gazetted hotels: with effect from January 2011, AV of hotel rooms is assessed at 25% of gross room receipts in the preceding year while other lettable areas such as retail shops, food & beverage outlets and function rooms are assessed based on current market rents.

Annual Value (s$)progressive tax

rates from 1 January 2011 (%)

First 6,000 0.0

next 59,000 4.0

Amount exceeding 65,000 6.0

Section 6(6) of the Property Tax Act provides exemption from payment of Property Tax when the Comptroller is satisfied that a building or any part thereof is used exclusively: • as a place for public

religious worship.• as a public school which

is in receipt of grant-in-aid from the government.

• for charitable purposes.• for purposes conducive to

social development in Singapore.

oWner-oCCupied residentiAL properties

Prior to 1 January 2011, owner-occupiers of residential properties are eligible for a concessionary owner-occupier’s tax rate of 4% per year. However, with effect from 1 January 2011, a new progressive three-tier owner-occupier’s tax schedule has superseded the flat 4% tax rate as follows:

property taxProperty tax is levied on the owners of all immovable properties in Singapore in accordance with a percentage of the Annual Value (AV) of the property. The immovable properties include Housing & Development Board (HDB) flats, houses, offices, factories, shops & land.

AV, which is determined by the Chief Assessor, is defined as the estimated annual market rent for which a property may be let, excluding other expenses payable by the landlord such as maintenance costs, insurance and other taxes.

Nonetheless, AV is assessed differently for the following types of properties:

source: irAs

Singapore Market Overview 26


• If the property is intended for letting but failed despite reasonable efforts having been

made to secure a tenant in a fair market;

or• If the property is undergoing

repairs so as to make it fit for occupation (repairs do not include renovations, fitting out, alterations, improvements

and additions).

With effect from 1 January 2014, the property tax refund concession on unoccupied buildings will be removed and all vacant buildings will be taxed at prevailing rates.

Annual Value (s$)

progressive tax rates from 1 January 2014

(%)

progressive tax rates from 1 January 2015

(%)First 8,000 0.0 0.0

next 47,000 4.0 4.0

next 5,000 5.0 6.0

next 10,000 6.0 6.0

next 15,000 7.0 8.0

next 15,000 9.0 10.0

next 15,000 11.0 12.0

next 15,000 13.0 14.0

AV in excess of 130,000 15.0 16.0

Annual Value (s$)tax rates from 1 January 2014

(%)

tax rates from 1 January 2015

(%)

First 30,000 10.0 10.0

next 15,000 11.0 12.0

next 15,000 13.0 14.0

next 15,000 15.0 16.0

next 15,000 17.0 18.0

AV in excess of 90,000 19.0 20.0

LAnd And non-residentiAL properties

The property tax rate for land and non-residential properties remains unchanged at 10%.

VACAnt properties

Property tax is payable regardless of whether the property is vacant or occupied. However, property owners are eligible to claim a vacancy refund if the property has been vacant for at least 30 days continuously

or in a calendar month, subject to the following criteria:

In Budget 2013, it was announced that a more progressive tax structure for all owner-occupied residential properties will be in place from 1 January 2014 and 1 January 2015:

non oWner-oCCupied/inVestment residentiAL properties

Currently, the tax rate for let-out residential properties is at a flat 10%. As announced in Budget 2013, non-owner-occupied residential properties with AV above S$30,000 will be taxed at the following new progressive tax rates:

source: irAs

source: irAs


prime 60-year leasehold factory (ground floor)

residential (prime district luxury)

prime cbd (orchard road) Strata-titled Shops

office (raffles place grade a)

$Price rent Areas

Quoted in per sq ft Quoted in sq ft or sq m

unitS of meaSurement

Price and rent are typically quoted on a per square foot (per sq ft) basis.

Areas are typically quoted in square feet (sq ft) or square metres (sq m).

f g property yieldS

Property Yields by Sector (2003 - 2012)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42003 2004 2005 2006 2007 2008 2009 2010 2011 2012

source: Colliers international singapore research

+


Sales and Purchase of Real Estate

a

cb

option to purchaSeStamp dutyfinancing

Sales and Purchase of Real Estate 3433 Sales and Purchase of Real Estate

option to purchaSe

The option to purchase is generally valid for three weeks. In order to gain this right or option, a booking fee of between 5% and 10% of the purchase price is payable by the intending purchaser.

To exercise the Option to Purchase, a Sales and Purchase Agreement has to be signed and a down payment has to be paid. The intending purchaser has to exercise the Option within its validity period if he decides to buy the property or the booking fee will be forfeited if he fails to do so.

aStamp duty

buyer’s stamp dutyStamp Duty is a tax payable on documents pertaining to transactions or transfer of interest of immovable properties, stocks or shares. Generally, the buyer is responsible for paying the Buyer’s Stamp Duty (BSD).

Additional buyer’s stamp dutyAn Additional Buyer’s Stamp Duty (ABSD) is to be paid by certain groups of people who acquire residential properties (including residential land) on or after 8 December 2011.

On 11 January 2013, the government announced the revised ABSD rates applicable to acquisitions of residential properties on or after 12 January 2013. Affected buyers are required to pay ABSD on top of the existing BSD.

Buyer’s Stamp Duty Rates

based on the purchase price or market value, whichever is higher:

• 1% on first S$180,000

• 2% on next s$180,000

• 3% on the remainder

bOption to Purchase

valid for

3 weeks

booking fee:5% - 10%

of the purchase

price

How to exercise the Option

Obtain a signed Sales and Purchase Agreement

Pay downpayment

Exercise the Option within validity period.

Otherwise, booking fee will be forfeited

source: irAs


Buyer’s Stamp Duty and Additional Buyer’s Stamp Duty for Residential Properties

Profile of Buyer

based on purchase price or market Value, whichever is higher

bsd ratesAbsd rates between 8 december 2011 and

11 January 2013

Absd from 12 January 2013

Foreigner and entity buying any residential

property

1% on first s$180,000

2% on next s$180,000

3% on the remainder

10.0% 15.0%

singapore permanent resident buying first residential property

nil 5.0%

singapore permanent resident buying second

and subsequent residential property

3.0% 10.0%

singapore Citizen buying first residential property nil nil

singapore Citizen buying second

residential propertynil 7.0%

singapore Citizen buying third and subsequent residential property

3.0% 10.0%

seller’s stamp duty (ssd)SSD is payable if the properties are disposed of within a specified holding period from the date of purchase.

residentiAL properties

The rates of SSD payable on residential property purchased on or after 20 February 2010 and sold within a certain time, are summarised in the table. (Please see Page 37)

Where the sale comprises only a partial interest in the residential property, the SSD payable will be based on the consideration or market value of the partial interest.

industriAL properties

The SSD rates payable on industrial properties and land bought on or after 12 January 2013 and sold within three years of the date of purchase, are summarised in the table. (Please see Page 39)

Where the sale comprises only a partial interest in the industrial property, the SSD payable will be based on the consideration or market value of the partial interest. For the purpose of determining SSD, joint tenants are assumed to equally own divided shares in the property.

source: irAs


date of purchase / Acquisition or date of Change of Zoning / use holding period rates

between 20 February 2010 and 29 August 2010 (all inclusive)

up to 1 year1% on first S$180,0002% on next s$180,000

3% on remainder of the consideration or value, whichever is higher

more than 1 year no ssd payable

between 30 August 2010 and 13 January 2011 (all inclusive)

up to 1 year1% on first S$180,0002% on next s$180,000


more than 1 year and up to 2 years0.67% on first S$180,0001.33% on next s$180,000


more than 2 years and up to 3 years0.33% on first S$180,0000.67% on next s$180,000


more than 3 years no ssd payable

on or after 14 January 2011

up to 1 year 16% of consideration or value, whichever is higher

more than 1 year and up to 2 years 12% of consideration or value, whichever is higher

more than 2 years and up to 3 years 8% of consideration or value, whichever is higher

more than 3 years and up to 4 years 4% of consideration or value, whichever is higher


Seller’s Stamp Duty for Residential Properties

source: irAs


NEW residential property

loans

Loan tenure

Effective from 12 October 2012, the maximum tenure for all new residential property loans will be capped at 35 years.

Seller’s Stamp Duty for Industrial Properties

date of purchase / Acquisition or date of Change of Zoning / use holding period rates


up to 1 year15% of consideration or market value, whichever

is higher

more than 1 year and up to 2 years

10% of consideration or market value,

whichever is higher

more than 2 years and up to 3 years

5% of consideration or market value, whichever

is higher


financing

Cost of CreditThe lending rate in Singapore is usually pegged to SIBOR plus a premium, which is dependent on the credit standing of the borrower.

Borrower’s Profile Lending rates

AAA-ratingsibor + minimum 120 bps

institutional investors / Funds

sibor + 200 to 250 bps

Average individual sibor + 250 to 300 bps

c

Maximum loan tenure = 35 yearssource: irAs


Loan-to-Value (LtV) ratio

residentiAL properties

Effective from 12 January 2013, the LTV limit for the non-individual borrower is lowered from 40% to 20%.

The LTV limit for an individual borrower is as summarised:

non-residentiAL properties

For non-residential properties, an LTV cap of 80% is typically applied, subject to the credit standing of the borrower.

Borrower Who is an Individual

date of purchasenumber of

outstanding Loan(s)

LtV ratio Applicable

minimum Cash down payment

the tenure of loan is less than or equal to 30 years

and

the sum of the loan tenure and the age of the borrower, at the time of

loan application, is less than or equal to

65 years


none 80% 5%

1 50% 25%

2 or more 40% 25%

the tenure of loan is more than 30 years

or

the sum of the loan tenure and the age of the borrower, at the time of loan application, is more

than 65 years


none 60% 10%

1 30% 25%

2 or more 20% 25%Legal FeesConveyance fees are generally negotiable.

source: monetary Authority of singapore (mAs)

Leasing Practices

45 Leasing Practices

RESIDENTIAl RETAIl

OFFIcE INDuSTRIAl

lEASE TERM usually two years with an option to renew for another one year typically three years with an option to renew for a further term of three years

Typically three to five years with an option to renew for a further term of three years or more

typically two to three years with an option to renew for a further term of similar duration

RENTAl cOSTS

• The base rent is quoted on a monthly gross basis on the floor area of the premises, inclusive of monthly maintenance charge

• If furniture is included, there will typically be a furniture rent component

rents are quoted based on either of the following:• Gross monthly base rent + service charge + a percentage of gross sales turnover (typically 1.0% to 2.0%); or• Gross monthly rent or a percentage of gross sales turnover (typically 15.0% to 18.0%), whichever is higher.

The base rent is quoted on a monthly gross basis on the floor area of the premises. A service charge is included in the monthly gross rent.

The base rent is quoted on a monthly gross basis on the floor area of the premises. A service charge is included in the monthly gross rent.

RENTAl RENEWAl RATES mutually agreed rate using the benchmark from current market rental level

based on prevailing market rate. some tenants may be able to negotiate for a cap to the rental increase, typically up to 30.0%.

Generally based on prevailing market rate. the rental rates may also mutually agreed at the onset if the tenant expresses commitment to expansion within the building.

based on prevailing market rate or prior mutually-agreed rent

FIT-OuT / RENT FREE PERIOD n.A.

Generally, landlord will provide a one month rent-free fit-out period. Depending on the market conditions, rent-free fit-out period of up to three months could be provided for restaurants or larger premises, on a case-by-case basis.

Generally, landlords will offer a one month rent-free fit-out period to up to three months or more for larger premises. this is usually negotiated on a case-by-case basis, depending on the state of the market.

depending on lease term and size of the premises, landlords typically will offer a one to two-month rent-free fit-out period.

ADDITIONAl RENT FREE PERIOD / INcENTIvES n.A.

Additional rent-free periods or other incentives may be extended by landlords, on a case-by-case basis, depending on the state of the market. however, this is not commonly practised.

Landlords may provide rent holidays, depending on market conditions. Generally, for buildings owned by funds, the landlords are more willing to grant rent holidays so as to maintain the quoted rent rate.

May offer rent holidays or cash incentives to attract and retain tenants, depending on market conditions. For mid-sized companies, landlords may give cash incentives of one-month's rent to offset the tenants' fit-out costs.

SEcuRITy DEPOSIT typically two months’ rent for a two year contracttypically three months’ rent. if the paid-up capital of the business is less than s$100,000, the security deposit can be increased to six months, depending on the landlord's requirements.

typically three to six months’ rent. if the paid-up capital of the business is more than six months gross rent, landlords generally accept three months’ rents as a deposit.

minimally three months’ rent. this may be increased depending on the lease term. Generally, for leases over three years, an additional one month’s gross rent for every year exceeding the three-year term is payable.

STAMP DuTy

stamp duty is also levied on lease/tenancy agreements that are prepared and signed when a property is let. it is calculated on actual rent or market rent, whichever is higher.

stamp duty is payable by tenant or lessee.

Lease/tenancy rates

(a) Where annual rent does not exceed s$1,000 exempted

(b) Where annual rent exceeds s$1,000, stamp duty is based on the contractual rent or market rent, whichever is higher

- For every s$250 or part thereof of the average annual rent for lease term:

up to 1 year s$1.00

more than 1 year and up to 3 years s$2.00

More than 3 years or for an indefinite term s$4.00

Leasing Practices 46

Colliers at a Glance

our presence:62 countries Our offices: > 480 our professionals: > 13,500

$our revenue in 2012:

US$2 billion in revenue

our transaction Value in 2012:

US$71 billion

rent

our managed property in 2012:

1.12 billion sq ft

Colliers International (Singapore) Pte Ltd1 Raffles Place #45-00 One Raffles Place Singapore 048616

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dennis yeomanaging directoremail [email protected] +65 6531 8688

grace ngdeputy managing director | Auction & salesemail [email protected] +65 6531 8500

tan boon leongexecutive director, project & sales | industrial servicesemail [email protected] +65 6531 8682

brenda ongexecutive director, project & Leasing | industrial servicesemail [email protected] +65 6531 8685

marcus looExecutive Director | Offices Servicesemail [email protected] +65 6531 8670

tang wei lengexecutive director | investment servicesemail [email protected] +65 6531 8586

calvin yeodeputy managing director | retail and Client servicesemail [email protected] +65 6531 8671

ho eng Joomanaging director | residential servicesemail [email protected] +65 6531 8618

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