What is the 60:40 rule?
The 60:40 rule is URA's guideline for how the floor space in an industrial unit can be used. In plain terms: at least 60% of the unit's gross floor area must be used for the actual industrial activity, and up to 40% can be used for ancillary (supporting) purposes. URA applies this to both B1 and B2 industrial property; for multi-user developments the controls apply at the development level (including common areas), and for strata-subdivided units, within each strata unit.
The rule exists to keep industrial property genuinely industrial. Industrial land and rents are priced lower than commercial office space for a reason — the government wants it used for real industrial activity, not quietly converted into offices.
What counts as the 60% industrial use?
The 60% must be used for the core industrial activity the unit is approved for — things like manufacturing, assembly, processing, warehousing, storage, packing, testing, or repair. This is the main reason the unit exists.
If your operation is a conventional independent office with no qualifying industrial or approved e-business activity — for example, a standalone consultancy or accounting office — then an industrial unit generally isn't suitable as the primary office, and the 60:40 rule is exactly why.
What fits in the 40% ancillary?
The 40% can be used for supporting functions that serve the main industrial activity. Common ancillary uses include:
- Office space (admin, finance, HR, sales coordination tied to the industrial activity)
- Meeting rooms
- Showroom (for displaying products you make or handle)
- Pantry and staff rest areas
- Reception or enquiry counter
The 40% is a shared cap — not 40% each
A common misunderstanding is thinking you get 40% for office plus 40% for showroom plus 40% for pantry. That's not how it works. The 40% is one shared quantum — all your ancillary uses draw from the same 40%. So if you want a big showroom and a big office, they have to fit within that 40% together.
This matters when you're planning your fit-out. If you over-allocate to office or showroom and squeeze the industrial area below 60%, you can fall foul of the rule.
Why this matters when you choose a unit
If you're a genuine industrial business — you make, store, pack, assemble or process something — the 60:40 rule usually works in your favour. You get a proper industrial unit with a back-office area, often at a lower cost than commercial office space.
But if you're hoping to use an industrial unit mainly as an office to save on rent, the rule is designed to stop exactly that. Using industrial space as a pure office can lead to action from URA, the landlord, or the building management. As an agent, I also can't market an industrial unit as office space under CEA's advertising guidelines.
So before you commit to a unit, I'll check that your actual business activity fits the zoning and the 60:40 split — so you don't end up in the wrong place.