Retailers and industrialists can expect rents to decline in the coming years, said Minister of State for Trade and Industry Teo Ser Luck yesterday.
In the next three years, about 500,000 sq m of multiple- user factory space will become available each year.
In the same period, 145,000 sq m of new shop space will be completed yearly as well. This is double the average annual demand for such spaces in the last three years, he said.
Mr Teo was replying to Ms Lee Bee Wah (Nee Soon GRC) who had asked if the Government was taking steps to help small and medium-sized enterprises (SMEs) cope with rising costs, especially rents.
Median retail rents have gone up in line with inflation based on data from January 2012 to May last year, Mr Teo said.
The median is the midpoint of a range.
While one in 10 tenants experienced rent increases of more than 50 per cent during this 15-month period, they tend to be tenants renewing their leases after more than four years, or who had units in more attractive locations, he added.
For about one in four tenants, rents either remained unchanged or declined.
While the Government has provided property tax rebates in the past to help reduce business costs during severe economic downturns, such measures are “not necessary” as “current economic conditions are sound and rentals are expected to moderate”, he added.
Ms Denise Phua (Moulmein-Kallang GRC) said instances of landlords demanding rent increases of “as high as 100 per cent” continue to contribute to public perception that rents are escalating.
“The perception seems to be persistent... and that perception has to be addressed,” she added, calling for more transparent rental data to be made available “as soon as possible”.
Replying Mr Teo said the Government will continue to keep an eye on the rental market to make sure that SMEs do not face “tremendous” rent hikes.
It is still in the process of collecting rental data from various market stakeholders, with the aim of making comprehensive shop rental data available by this year, he added.