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Defu Industrial Estate poised for big makeover

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The shabby and rambling Defu Industrial Estate is all set to be transformed into a gleaming, modern industrial park - with five times the current factory space and a city centre by its side.

The transformation will take place over the next 15-20 years, with existing factories progressively giving way to modern complexes. The estate itself will see landscaped greenery and environmentally sustainable features sprouting up. And while there could be tweaks along the way, the current plan is for six-storey buildings to rise in the new Defu Industrial Park.

The Defu City Centre, to be located beside Defu Industrial City in the new park, will provide the commercial buzz - including food-and-beverage outlets, convenience stores, medical clinics and childcare centres. This will be built after 2017, when the site is available for development.

Defu Industrial Estate is currently home to some 1,046 factories. It will be redeveloped in three phases from next year and the first phase is expected to be completed by mid-2017.

A total of 219 factories will be involved in Phase 1 of the redevelopment. These include 87 land-based factories which are on 30-year leases, along with 42 land-based factories and 90 terrace workshops on fixed-term tenancies.

As part of the redevelopment, two new complexes - Bedok Food City and Defu Industrial City - will be constructed to facilitate the relocation of the factories.

Factories in the food industry will be relocated to Bedok Food City while those in general industries will move to Defu Industrial City, a 13-hectare site adjacent to the Kallang-Paya Lebar Expressway.

According to Dominic Peters, director of industrial and business space at Savills, the development of a niche food factory space is timely considering the shortage of such premises. Productivity could also rise with new machinery and better designed facilities.

However, food factory industrialists that BT spoke to were less optimistic about the upcoming change.
"We are very concerned about the possible increase in rents as well as the impact it will have on our employees" said Desmond Goh, director of People Bee Hoon Factory, whose factory has been located in Defu Industrial Estate for over 30 years.

Mr Goh, who is in the business of producing rice vermicelli, said that workers living close to the current premises may quit if the factory were to relocate to Bedok Food City.

"And furthermore if we get hit by the rent increase it will be a double whammy," he said.

Construction of both the Bedok Food City and Defu Industrial City will begin in 2015 and is expected to be completed by mid-2017. Eligible industrialists will continue to operate in their existing premises until the new complexes are completed, upon which they will be given relocation benefits such as a rent concession, a rent-free fitting-up period, and an ex-gratia payment of $48,000 per relocated unit.

Also, upon completion of Defu Industrial City in 2017, HDB plans to develop the new Defu City Centre.
HDB wants to redevelop the 30-year-old Defu estate to optimise land use and to contain the pollution caused by the existing industries.

With the new industrial park, the total amount of factory floor space is expected to increase five-fold to 2.1 million square metres of industrial space.

Although market analysts welcomed the redevelopment plans to spruce up the dilapidated estate, they warned of the current lack of demand for such sites.

Defu Industrial Park will eventually house three key zones. The northern and central zones will be safeguarded for strategic industries such as logistics, precision engineering, infocommunications and media, electronics, clean energy and biomedical. The southern zone will be set aside for modern industrial complexes to house existing industrialists.

Credit from Business Times - 6 December 2012
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