Commercial & Industrial Leasing (rent review, service charge, JTC)

How the rent is structured

• Base rent — a fixed monthly rent, often quoted per square foot of net lettable area (NLA): the usable area inside the unit, excluding lobbies, corridors, lift shafts and common toilets. NLA is usually smaller than the strata area on the title.
• Turnover (percentage) rent — common in malls: a base rent plus a percentage of gross sales, often only on sales above a threshold. It is never one or the other.
• Gross vs net lease — under a gross lease the tenant pays one all-in rent and the landlord bears the outgoings; under a net (triple-net) lease the tenant pays base rent plus property tax, insurance and maintenance. IRAS still levies property tax on the owner; a clause making the tenant bear it only gives the landlord a right to be reimbursed.
• Rent review — a contractual reset, commonly every 2–3 years, to market rent, by a fixed percentage or by an index. An upward-only clause keeps the passing rent as a floor; an open review can take the rent down. No statute implies a review: without a clause, the rent stays as agreed for the whole term.
• Rent-free or fit-out period — a window at the start for the tenant to fit out before rent begins. Its length is fixed by the lease dates, so a tenant who fears delay must negotiate it before signing.

Effective rent is how a tenant compares offers with different headline rents and incentives: a $10,000 face rent with three months free costs less than a $9,300 rent with none.

The other key clauses

• Service charge — the tenant's share of running the common property and shared services (cleaning, security, common-area power, lifts, management). It is separate from rent, is not held as security, and is not refunded at the end.
• Permitted use — a private term limiting the trade. It does not replace planning control: a change of use needs URA's written permission under the Planning Act, which no landlord or management corporation can grant or waive.
• Fit-out and reinstatement — premises are often handed over bare shell; at the end the tenant must strip out and reinstate to the original condition, failing which the landlord does the work and recovers the cost, often from the deposit.
• Security deposit — commonly about 3 months' rent, held against default and returned less proper deductions. A top-up clause makes it follow the reviewed rent.
• Assignment and subletting — usually need the landlord's consent. Unless the lease says otherwise, no fine may be charged for giving consent, though the landlord may recover reasonable legal costs (Conveyancing and Law of Property Act 1886 s 17).
• Option to renew — binds the landlord once properly exercised, but only if it is certain: a rent left to be agreed with no machinery is unenforceable, while prevailing market rent fixed by an independent valuer is certain.
• Letter of intent — whether it binds depends on its wording and on whether the parties meant to be bound, not on its label or the signatures.