Industrial Property 101

B1 vs B2: Matching Your Business To The Right Zone

Choosing between B1 and B2 is often the first major decision.

• B1 zones are generally reserved for light and clean industrial uses, such as light manufacturing, R&D, high-tech and certain service industries with low nuisance levels.​

• B2 zones are for heavier uses like engineering, fabrication, certain logistics operations and trades that generate more noise, traffic or emissions and need bigger buffers.​

• Running a heavy B2-type operation in B1 space risks complaints, enforcement action and even forced relocation if agencies deem the use incompatible with the planning intent.​

If you use heavy machinery, create noise or handle frequent truck traffic, you should plan around B2 zoning from the start rather than trying to “squeeze” into B1.

The 60/40 Rule: Why You Can’t Just Run Offices In A Factory

Industrial space is not meant to become cheap office space, so there are clear limits on how much of it can be used for non-industrial functions.

• URA’s 60/40 framework requires at least 60% of the gross floor area in certain industrial developments to be used for core industrial activities such as production, warehousing and processing.​

• The remaining 40% can be ancillary – for example, internal offices, staff facilities and circulation directly supporting the industrial operations – but not standalone commercial uses.​

• Using most of an industrial unit as a pure office, showroom or training centre typically breaches this rule, even if the landlord agrees, and can trigger enforcement action.​

Before you commit to a lease or purchase, verify that your intended use fits both the zoning (B1/B2) and the 60/40 requirements, and clarify with JTC/URA if you plan any change of use.​

How The Industrial Market Has Been Moving

Knowing the recent rental and price trends helps you budget and decide on lease length or whether to buy.

• JTC’s Q3 2025 statistics, reported by The Business Times and CBRE, show industrial rents rising 0.5% quarter-on-quarter and 2.3% year-on-year, marking the 20th consecutive quarter of rental growth.​

• Industrial prices also climbed 0.6% quarter-on-quarter and 5.7% year-on-year, with warehouse and high-spec spaces outperforming older stock.​

• Cushman & Wakefield’s commentary notes that the sector remains a relative bright spot in Singapore’s commercial real estate, though growth is becoming more uneven across subsectors.​

For SMEs, this means that industrial occupancy costs have been on a steady upward trend, so decisions about lease length, space size and location should be made with a multi-year view.

Buy Or Rent: What Should A Business Owner Consider?

Whether you should continue renting or buy your own industrial unit is as much a business strategy question as a property decision.

• Bank guidance highlights that industrial assets can offer higher yields than residential but come with shorter lease tenures and more cyclical demand, so cash flow planning is critical.​

• Over a 10-year horizon, SMEs should compare total rent (including likely annual increases) against ownership costs (loan instalments, taxes, maintenance, and potential resale value), rather than just looking at today’s monthly numbers.​

• Your decision should also consider how stable your operations, headcount and space needs are, and whether tying up capital in real estate is better than deploying it into core business growth.​

A disciplined, data-backed comparison – using official stats and reputable market reports – will make your industrial property decision much less of a guess and far more aligned with your long-term business goals.