While retail rents across Singapore stayed stable in the first quarter of the year, falling 0.5 per cent according to the Urban Redevelopment Authority, an average of 450 retail stores shuttered monthly within that period.
Last year, more than 3,000 food and beverage (F&B) establishments closed in the country – the highest in almost two decades since 2005. Owners told CNA then that rising operating costs, including rent, took a toll on their business.
RENTAL CAP AMONG SUGGESTIONS
SGTUFF is calling for retail lease reforms that include a cap on rental lease renewals, more prime spaces for local players, and penalties for landlords if they keep the shops empty for more than three months.
It also recommended policies to address what it calls “new and foreign players” with deep pockets and low-cost supply chains, who are willing to pay premium rents.
Among its policy suggestions are an additional property tax for non-local retail tenants, reduced foreign worker quota, and higher levies for foreign workers.
It has also called on the government to find ways to release more retail space not just to private landlords, but social enterprise cooperatives or private entities that are not purely for profit.
SGTUFF chairperson Terence Yow said the group’s idea of a cap on lease renewals came from other developed markets around the world such as Japan and Sweden, where rent renewals for commercial spaces are pegged to a formula or measure like the consumer price index.
“We think that such indexing of rent renewal increases is very fair … and is a fair reflection of market conditions, rather than very arbitrary or mercenary … price increases, which are too much of a shock for businesses today,” he told CNA on Monday (Jun 2).
