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Over 300 mall tenants call for more rental rebates, fairer tenancy agreements

MORE than 300 mall tenants in Singapore have united to press for additional rental help from landlords as pressures from the ongoing novel coronavirus outbreak exacerbate an already sluggish retail scene.

Beyond the outbreak, they are calling for a rework of the Fair Tenancy Framework amid what they see as an uneven playing field between landlords and tenants. 

Speaking to The Business Times on Friday, representatives of the group called SG Tenants United for Fairness, which comprises largely retailers, said that they are seeking 50 per cent rebates off three months' rent from landlords to help them cope with the hit to their businesses. 

Current measures, such as savings from the property tax rebate and using security deposits to offset rent, are helpful but remain insufficient to tide businesses over what may become a prolonged outbreak, the group said. Already, about 43 per cent of its members surveyed said they have started to lay off staff. 

The group intends to negotiate with landlords collectively this month, but said it would not take to the streets in protest or close shops in a strike just like in Hong Kong, noting that tenants in the territory face a different situation marked by political demonstrations.

But beyond the virus outbreak, the group also wants to have the Fair Tenancy Framework relooked. It was introduced in 2015 but has since been "unsuccessful in creating a level playing field for rental terms between landlords and tenants", the group said. 

Citing an example, they highlighted how most rental agreements are structured in the form of a high fixed base rent and a small component - typically 1 to 2 per cent - that's based on a business' variable gross turnover. This means that during times of low sales, landlords are largely shielded from the impact. 

A fairer structure could be rental agreements comprising a higher or full variable gross turnover component, the group suggested. 

"We seek to work closely with landlords to fully appreciate each other's situation and come up with win-win solutions for both the short- and long-term good of the industry, thus reflecting the true symbiotic nature of the tenant-landlord relationship," they said. 

The group added that it has met and shared its plans with trade associations, including the Singapore Retailers Association, and government bodies such as Enterprise Singapore. "We have received support for our position and action plans."

Their call adds to those from various fronts, including government leaders, for landlords to lend more support to tenants. In Parliament, Trade and Industry Minister Chan Chun Sing recently urged major landlords to help retail tenants tide through the challenges of the Covid-19 outbreak, saying that it would be "very short-sighted for landlords to try to stinge and save a bit here and there, instead of passing on some of the benefits to their tenants".