The Urban Redevelopment Authority (URA) has a 60 : 40 usage rule for certain industrial buildings and business parks. This is to ensure that these buildings serve their intended purposes, supporting Singapore’s broader urban planning and economic development goals. Below are simplified guide on the rule about what tenant and owners need to know.
Table of Contents
What is URA 60:40 Rule?
• Regulation: URA 60:40 rule mandates that at least 60% of the total gross floor area (GFA) in a building must be allocated to core industrial or production activities. The remaining 40% can be used for ancillary areas (e.g. lift lobbies and circulation spaces) or secondary uses that support the primary industrial activity.
• Why? This rule ensures that industrial spaces and business parks are primarily used for designated purposes and not converted into other types of commercial or residential use.
• Implementation: A unit in industrial building or business parks is not allowed to be used 100% as office, shop front eg. travel and maid agencies, accounting firms, law firms, advertising agencies, tuition center, supermarket, religious activities, child care, etc. There need to be a predominant use of minimum 60% to be set aside for core industrial activities such as manufacturing in Industrial building or research and development activities in Business Parks (See below for allowed business activities). All supporting uses must be kept within the 40% ancillary component of industrial developments such as office function eg. Human resource, admin, finance, sales and marketing, pantry, entertainment area, etc. Note that businesses can use up to 100% of the space for core activities if ancillary support function is not required.
Type of buildings covered by URA 60:40 Rule
Industrial Building
B1 & B2 Industrial Buildings
– B1 (Light Industrial): Suitable for clean, light industrial activities that do not generate noise, odour, or pollution with nuisance buffer of 50m or less.
– B2 (General Industrial): For activities that may have a greater environmental impact (nuisance buffer more than 50m but still within health and safety limit).
Business Parks
Business Parks:
These buildings are designed for high-tech industries, research and development (R&D), and knowledge-driven activities.
Allowed Business Activities under URA 60:40 Rule
Predominant & Ancillary Uses
1. Core Industrial (60%):
– Manufacturing
– Assembly and production
– Warehousing and logistics
– Research and development
– Clean and light industries (B1)
– Heavier manufacturing (B2)
2. Ancillary Uses (40%):
– Office spaces (if directly supporting industrial functions)
– Staff amenities (e.g. pantry, training rooms)
– Showrooms (linked to the company’s products)
3. Business Parks:
– Research & Development
– Bio-medical, Life Science
– Core Media, E-business
– Knowledge-intensive industries
– IT-related and software development
Non-compliance risks to URA 60:40 Rule
• Penalties: Fines of up to S$200,000 or up to 12 months’ jail, or both (Generally, the authorities will be giving warning within a reasonable but definitive timeframe to cease the unauthorised uses first before resorting to legal action).
• Loss of Approval: URA can revoke the given business approval if it violates zoning or usage rules.
• Disruption: Non-compliance could lead to eviction, operational delays, and business closure.
The breach of URA 60:40 rule is commonly found in industrial building as businesses take advantage of a cheaper rental rates compared to that of commercial or retail building. Read this news article by The Business Times reporting a widespread misuse of industrial building in breach of URA 60:40 utilisation rule.
In a widely reported case in November 2023, a local digital lock company who have several branches islandwide, My Digital Lock operated a showroom at ground floor or A’Posh Biz Hub at Yishun Industrial St 1 (B1-zoned building) without the requisite planning permissions. As the land is primarily designated for use as factories and warehouses, URA issued enforcement notices and demanded Land Betterment Charges from change-of-use of nearly S$500,000 (for their HQ that comprises of 3 units) every 3 years. The owner, Mr Ronn Teo describe his ordeal and even posted a Facebook video about it.
Summary
The URA 60:40 rule plays a critical role in ensuring that industrial and business park spaces in Singapore serve their intended purposes. Under this rule, at least 60% of a building’s gross floor area (GFA) must be allocated to core industrial or production-related activities, while up to 40% can be used for ancillary functions that directly support these operations.
This regulation primarily applies to industrial buildings and business parks. It limits unrelated commercial uses such as retail and entertainment.
For businesses, adherence to the 60:40 rule and aligning their activities align with zoning requirements is essential to avoid penalties, fines, or disruptions.
