Finding the Right Industrial Space

Finding the Right Industrial Space

According to a report by ING* the industrial production in Singapore grew by 7.3% in 2020. The year-on-year growth in December 2020 itself was 14.3% and the trend is expected to continue upwards for some time. This can partly be attributed to the sudden growth of e-commerce (boosted due to the pandemic through online shopping) and the consequent need for warehousing facilities.

Due to the limited land and high cost of talent, Singapore’s industrial production has never focussed on low-cost mass production. Instead, industries here are involved in advanced technologies and research industries like pharmaceutical, biomedical, electronics, and precision engineering. Accordingly, the government policies and regulations have also evolved to cater to industrial growth.

When looking for industrial space in Singapore, therefore, it is important to consider all factors carefully before you select a space.

Type of Industry

The Singapore Government has categorised different zones for different kinds of industries and only the specified types of businesses are allowed to conduct industrial activity in those zones. For example, food factory zones are only for food manufacturing and packaging; the Tuas Medical Park is for bioscience and medical-related industries only.

Second, all industrial activities can also be classified as B1 or B2 business parks as per Singapore regulations. B1 refers to light industrial activities that need less than 50 nuisance buffers. This includes warehousing or repackaging activities that are not noisy or polluting. B2 refers to heavy industrial activities that requires more than 50 nuisance buffers. All industrial spaces are designated as B1 or B2, and so it is important to get a property suitable for the operations you are planning to conduct at that location.

You can also get properties that have B1, B2, and some additional office space in the same building. For example, the Tuas Vista property by Space Portal has different sized units available for B1 and B2 as well as small office spaces, which is suitable for those looking to have a warehouse attached office space for employees.

Location and Accessibility 

Apart from zoning, you also need to consider the accessibility of your business before finalizing an industrial property for rent in Singapore. For example, locations close to the expressway are always preferable for easy transportation of goods. If you are a supplier of raw materials, you would want to be located close to your customers for easy access to reduce the transportation cost and time.

Specific businesses may rely more on their location than others. Logistics operations require a location close to Changi Airport or the seaports, while businesses that transact frequently with Malaysian partners would prefer spaces in Woodlands.

Accessibility for employees should also be a factor when considering an industrial space. Locations close to an MRT station makes daily commute for employees easier and can help you gain and retain good talent. At Space Portal, you can check out our industrial properties that are in the vicinity of MRT stations.

Existing Infrastructure

Industrial spaces will always require some remodeling and restructuring for your everyday needs. If the space needs a lot of reworking to suit your business operations, it will have significant cost implications and a delayed start of your operations. This will impact other decisions for your business, such as supplier contracts, customer demand, etc.

On the other hand, if the existing structure already meets your requirements, the renovation costs will be low and you will be able to start operations soon.

The shared infrastructure in the surrounding is also a factor to bear in mind. Some modern industrial spaces have facilities like child-care centres, gyms, shops, and even swimming pools that are available for employees. This adds to employee benefits and can help in retaining talent.

Time to start operations

Depending on when you are intending to start your business operations, you also need to know when the property will be handed to you. Some businesses may already be operating out of your intended location in the meantime and will need time to relocate. You also need to consider the added time taken for renovation and initial set-up of operations, alongside some buffer days to arrive at a starting date. These are all factors that should be considered before you finalise on a place.

Operational Issues

Factors that can affect your day-to-day operations albeit small are still important when considering a space.

60:40 ruleAs per Singapore regulations, all designated industrial spaces need to utilize at least 60% of their total space for industrial activities. This means office space and other employee facilities will have to be within the remaining 40%.

Ceiling heightFor warehouses with large goods you may need a higher ceiling. Also, some factory operations require high spaces for their equipment. It is important to check this beforehand.

Floor load capacityIf you have heavy equipment or heavy goods to store, you need to check the amount of loading the floor of the industrial space can handle safely.

Heave vehicle permissions – Do check if the facility allows the type of transport vehicles that you use. Some places may have restrictions on vehicles they can accommodate.

Loading areaIf you are operating a factory or a warehouse, you will face frequent loading and unloading of material. Check if the loading bay is sufficient for your requirements.

ParkingCheck the number of commercial and non-commercial parking spaces included with the facility. Are they easily accessible – especially for commercial vehicles?

Finding a facility for your industrial operations can seem like quite a task, but with the Industrial Production outlook in Singapore looking positive moving ahead, this is one of the best times to start a business. Today most Industrial facility providers are also aware of the needs of their customers and are designing such facilities with them in mind.