CapitaLand Group
With a solid business ecosystem, we deliver long-term sustainable value to our stakeholders.
Singapore
English
CapitaLand Group
With a solid business ecosystem, we deliver long-term sustainable value to our stakeholders.
CapitaLand Group
With a solid business ecosystem, we deliver long-term sustainable value to our stakeholders.
07 Jul 2026
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If you are in the market for an industrial or logistics space for rent in Singapore, one of the first decisions you will need to make is whether to pick a B1 (Business 1) or B2 (Business 2) space. B1 and B2 industrial zoning is governed by the Urban Redevelopment Authority of Singapore (URA) under Singapore’s Master Plan. These zoning classifications determine the types of businesses that can operate in a building, what activities are allowed on site, as well as permitted space allocation.
Getting situated in the right zone matters — operating in the wrong zone can result in enforcement action from URA, costly relocation, or the need to apply for a URA Change of Use, which takes up time and carries fees. Whether you are a startup looking for a B1 industrial space, a pharmaceutical company seeking a compliant space, or a steel fabrication outfit requiring a robust B2 industrial facility, this guide covers what you need to know to make an informed decision.
B1 zoning is a URA land use classification that permits clean, light, and non-pollutive industrial activities. B1 zones are designed for industries that do not generate significant noise, odour, smoke, vibration, or other nuisances that would disturb surrounding residential or commercial areas. This makes B1-zoned buildings suitable for location in mixed-use or close-proximity-to-residential settings. The National Environment Agency (NEA) requires a 50-metre nuisance buffer between a B1 zone and its surrounding area.
80 Bendemeer Road: 10-storey high-specifications industrial building in a B1 industrial zone
Key characteristics of B1 industrial buildings in Singapore include:
Clean and non-pollutive: No emissions, noise, fumes, or vibration that affect surroundings
Flexible locations: Can be sited near residential, commercial, or business park zones
Diverse building types: Light industrial, flatted factories, or high-specifications industrial
URA 60/40 rule: At least 60% of the total gross floor area must be for core industrial use, with the remaining 40% for ancillary purposes
NEA nuisance buffer: 50-metres from a B1 zone to the surrounding area
Some permitted uses and industries in a B1 zone in Singapore include:
Light manufacturing: Electronics assembly, printed circuit boards, consumer goods
Precision products and precision engineering: Computer Numerical Control (CNC) machining, jigs, fixtures, and tooling
Selective laser melting (SLM) and additive manufacturing: 3D metal printing for aerospace and medical parts
Pharmaceutical packaging: Non-pollutive blister-packing and bottling of finished medicines
OEM manufacturing (light processes): Assembly and production under original equipment manufacturer contracts
R&D laboratories and testing: Research, prototyping, calibration, and analysis
Printing and publishing: Offset, digital, and specialty printing
E-commerce fulfilment (ancillary): Packing, sorting, and dispatching goods as a supporting function
Discrete manufacturing (light): Low-volume, high-mix production of electronics or hardware
Software development
Call centre
Media production
B2 zoning is a broader classification that accommodates general and heavy industrial activities, including those that generate noise, smoke, fumes, effluents, or other forms of pollution. B2 zones are typically located in dedicated industrial estates set apart from residential areas, with adequate buffer distances mandated by authorities. The National Environment Agency (NEA) requires a 100-metre nuisance buffer between a B2 zone and its surrounding area.
Corporation Place: Seven-storey high-specifications industrial building in a B2 zone
Key characteristics of B2 industrial buildings in Singapore include:
Broader industrial scope than B1 industrial buildings: Permits heavy, noisy, and pollutive manufacturing processes
URA 60/40 rule: At least 60% of the total gross floor area must be for core industrial use, with the remaining 40% for ancillary purposes
NEA nuisance buffer: 100-metres from a B2 zone to the surrounding area
Some permitted uses and industries in a B2 zone in Singapore include:
Steel fabrication and steel manufacturing: Structural steel cutting, welding, galvanising, and coating
Automotive manufacturing: Vehicle assembly, body fabrication, and component manufacturing
Wafer fabrication: Semiconductor chip manufacturing in cleanroom environments
Pharmaceutical manufacturing: Active pharmaceutical ingredient (API) synthesis and bulk drug production
Plastic factory operations: Injection moulding, blow moulding, and extrusion of plastic parts
Battery factory and battery assembly: Production and assembly of lithium-ion and industrial batteries
Just-in-time manufacturing: High-volume, time-sensitive production for automotive and electronics supply chains
Chemical processing and storage: Mixing, blending, and storing industrial chemicals
Textile manufacturing (industrial): Large-scale fabric dyeing, finishing, and coating processes
Warehousing: Storage and distribution of cargo
Food processing and food manufacturing: Baking, cooking, packaging, and cold storage
The Urban Redevelopment Authority of Singapore (URA) 60/40 rule
The URA 60/40 rule is a land use regulation that mandates that at least 60% of the total gross floor area (GFA) in industrial buildings and business parks must be allocated to core industrial or production activities. The remaining 40% can be used for ancillary functions like offices, staff amenities, or circulation spaces that directly support primary industrial operations.
Properties covered by the URA 60/40 rule include:
B1 Industrial Buildings: Light industrial activities that do not generate significant noise, odour or pollution
B2 Industrial Buildings: General industrial activities with greater environmental impact
Business Parks & Science Parks: Designed for high-tech industries, research and development, and knowledge-driven activities
Administrative and management offices
Reception and waiting areas
Meeting and conference rooms
Staff rest areas and pantries
Quality control and testing laboratories (where ancillary to production)
Setting up an independent serviced office, co-working space, or renting out office space to a third-party business that has no connection to your industrial operations is not permitted under the URA 60/40 rule. Doing so would require a separate URA planning approval or URA Change of Use application. Always verify with a qualified professional if in doubt.
A URA Change of Use is a planning approval required when you intend to use a premises for a purpose different from its currently approved use under the Master Plan. When moving between B1 and B2 zoning, or changing from an industrial to a non-industrial use, a Change of Use application must be submitted to and approved by URA before operations can legally commence.
The Change of Use process typically involves submitting an application via GoBusiness Singapore, with supporting documentation including the location plan, floor plan, owner’s consent, a cover letter, and clearance from other government agencies where relevant. The processing time for the application takes around 10 days. The processing fee for a Change of Use application is S$500.
The right answer lies in your intended use of the premises. Is your industry one that is clean, light, and non-pollutive, or one that will involve heavy industrial activities and include pollutive processes? The summary table below should help you with your decision-making process at a glance.
If you require an expert’s opinion, our friendly leasing team will be happy to answer any questions you may have.
Looking for a high-specifications industrial, light industrial, or logistics space in a B1 or B2 industrial zone for lease? Explore some of CapitaLand's featured spaces across Singapore.
Yes, but within limits in accordance with URA's 60/40 rule. In B1 and B2 industrial buildings, up to 40% of your unit's gross floor area may be used as ancillary office space. Critically, the office space must be ancillary to and directly supporting your core industrial business — you cannot sub-let it independently to an unrelated third party without a change of use approval.
You can check the URA e-service portal to identify the zoning classification for a specific address. Alternatively, consult URA’s zoning maps, ask your agent or developer, or look at building plans submitted to BCA, which may also indicate zoning.
The consequences can be severe. Penalties for non-compliance include fines of up to S$200,000 or up to 12 months’ jail, or both. Beyond financial penalties, URA holds the power to revoke planning approvals outright. Businesses found in violation risk forced eviction, costly operational disruptions, and in serious cases, permanent closure.
We have a vast portfolio of compliant B1 and B2 industrial spaces for lease in Singapore. To take a look at some of them, view our Industrial portfolio, which consists of B1 and B2 spaces spanning across high-specifications industrial and light industrial properties.
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