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Divestment helps JTC add value: CEO
[SINGAPORE] While acknowledging gripes by small and medium-sized enterprises (SMEs) over JTC Corporation's divestment of its industrial land, JTC chief executive Png Cheong Boon maintains that the divestment allowed JTC to turn its attention to areas it was able to better add value to.
This is part of the landlord and developer's four- pronged strategy, which comprises the development of specialised land and innovative space to support clustering; the creation of new land and space to catalyse new industries; the promotion of a stable and sustainable market; and the driving of innovation, sustainability and construction productivity in industrial infrastructure development.
As of 2013, JTC's market share of the available 9.4 million square metres (sq m) of multiple-user space stood at 3.5 per cent, compared with its pre-divestment stake of 18 per cent out of 7.96 million sq m in 2008.
"(We have) freed up our resources to go into (the development of) innovative space. We can develop new facilities . . . such as those that focus specifically on clusters, those that require common and shared facilities that will give a competitive advantages to companies," said Mr Png.
"Private developers are probably not willing to do this because of the upfront capital investment that is needed. So the divestment, on one hand, affects tenants in (previously JTC- owned) facilities but, on the other hand, allows us to focus on other aspects where we can add more value to industries," he said.
Yesterday, JTC unveiled a host of ideas stemming from its four key strategies. These ideas include the development of more innovative spaces and decking over major roads and highways.
For the former, innovative spaces for other key clusters identified include a poultry processing hub, a furniture/timber hub and a chemicals hub.
JTC is also looking at integrated multi-user factories for the oil and gas sector which could feature flatted factories for heavier manufacturing, warehousing space, offices and even dormitories for foreign workers.
"By co-locating (smaller players) into a single location, it fosters greater collaboration, reduces a lot of inefficiency and hopefully raises the productivity of the industry. For us, it helps optimise land use as well," said Mr Png.
A total of 16 Innovative Space projects are in the works - seven under development and nine on the drawing board. They are expected to add 800,000 sq m of multi-user space by 2017, said JTC.
Separately, JTC is looking at ways to deck over highways and major roads in its quest to create new land and space. This is in addition to other means such as land reclamation and the creation of underground spaces like the Jurong Rock Caverns.
"If you take the Ayer Rajah Expressway (AYE), NUS Science Park is physically separated from One North by the AYE. We want to build an integrated, connected community where the academia work closely with the industries . . . this physical separation prevents it from happening," said Mr Png.
If, however, there is a way to deck over the AYE, it would create a contiguous space for people to interact. While JTC is still studying the feasibility of such a deck, Mr Png said that it hopes to introduce offices or al fresco dining on the deck rather than an overhead bridge.
Mr Png also said that he expects industrial property prices to moderate further in light of the cooling measures and increased supply of multi-user space coming into the market.
Based on the average of 28 hectares of space released per year from 2010 to 2013, JTC estimates that from 2014 to 2016, two million sq m of space, including 500,000 sq m of multi- user industrial space, will be added annually.
This compares with an average annual demand of one million sq m of space.