SINGAPORE - Corporate landlords have been stepping up to help hard-pressed retail tenants amid new Covid-19 curbs that are keeping shoppers out of the malls.
At least five mall operators have pledged to help tenants hit by the stricter measures imposed on May 16 and due to end on June 13.
But some observers say the struggling retail sector needs more meaningful rental relief from landlords and the Government.
Some members in the Singapore Tenants United For Fairness group said the situation is so dire that it may be better if the country entered another circuit breaker or partial lockdown as this may trigger the kind of support measures implemented last year.
At the time, rental rebates and the Jobs Support Scheme (JSS) kicked in to rescue many firms from collapse.
Food and beverage (F&B) operators are getting some reprieve. While dining out is banned under the latest restrictions, the Government will increase the JSS support rate to 50 per cent of the first $4,600 of gross monthly wages paid to local employees for this period. This is up from the 10 per cent support for wages paid up to June.
But this has led many to question why retail, services and other non-food and beverage businesses have not received additional JSS support when they are suffering just as badly, if not worse.
In response to The Straits Times query yesterday, the Ministry of Finance said it and government agencies have received feedback from the retail sector. “We are closely monitoring the Covid-19 situation and are prepared to adjust the support schemes when needed,” the MOF said.
A poll by the 700-member Singapore Tenants United For Fairness found that more than 81 per cent of retail, F&B and service businesses saw sales fall by more than 50 per cent on May 16, when the latest curbs began, others by as much as 80 per cent.
"After a little more than a year of struggle since last March, small businesses cannot shoulder this kind of impact any more and we expect significant shop closures and staff layoffs to happen in the coming weeks," a spokesman for the group said.
It noted that 86 per cent of firms plan to close some shops and lay off staff, with some ready to exit their business completely.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises, noted: "There has been an immediate disappearance of retail footfall but only a few landlords say they will help. We hope landlords as a collective will do something.
"We are hoping that the Government will revive a property tax rebate equivalent of at least 0.35 month of rent to be rebated to retailers, and for landlords, also waive an equivalent 0.35 month of rent, this way, the pain is jointly shared between parties."
Mr Logan Wong, managing director of Pure Senses, which distributes Yankee Candle in Singapore, said revenue has been hit by the tighter restrictions as well as supply disruptions since last year as its United States factories are not yet operating at full capacity due to the pandemic.
Yankee Candle had 13 stores here but that has fallen to seven, he added, noting: "We exited three stores this year because the landlords refused to reduce our rent when our leases were up for renewal, and our sales were insufficient.
"If we can get at least two months of rent relief, that would be helpful. It would also help if rent is capped at 15 per cent of gross turnover. For example, if we do $10,000 of sales, we will pay $1,500 of rent. Fifteen per cent is close to the break-even point for most retailers."
Some of the bigger landlords are offering help.
Mercatus Cooperative, a subsidiary of NTUC Enterprise, said on May 15 that it will provide the "necessary rental, operational and marketing support".
It has already granted about $74 million of total rent relief to tenants and extended the interest waiver for outstanding rent payments from Feb 1 to Dec 31, 2020.
The Straits Times asked for details of the rental relief tenants would get but a spokesperson said: "We have no further information to share."
Mapletree Commercial Trust (MCT) said it would "provide the necessary rental and operating assistance where warranted".
MCT said it has already given more than $70 million of rental rebates to help eligible retail tenants offset on average of more than four months of fixed rents.
Suntec City said it will "continue to provide rental support in a calibrated manner on a case-by-case basis". It noted that since last year, a "vast majority" of its tenants had received at least four months of rental assistance.
"We have supported our mall tenants with short-term restructure of their rent to lower fixed rent and higher gross turnover rent. This approach has been adopted for recent lease renewals," said Mr Ivan Koh, chief executive of APM Property Management, the manager of Suntec City.
Suntec will allow flexibility for tenants to shorten store operating hours as well. It will also waive the payment gateway fees and commission for participating F&B tenants on its Suntec+ Eats platform, while in-mall and digital marketing support will be given to all affected tenants.
CapitaLand, which provided around $340 million of rental rebates to tenants last year on top of government subsidies, said it will provide retailers "with assistance that includes rental rebates and operational support to continue online sales through its digital platforms".
"In addition, we will be waiving the platform and commission fees for existing and new F&B operators who sign up with Capita3Eats," a spokesman said.
It has also extended the grace period for drivers visiting its malls to 30 minutes to ease fulfilment of food delivery and takeaway orders.
City Developments Limited (CDL) will offer rental, operational and marketing support to affected tenants, while those "facing severe cash flow issues will be offered rental payments via instalments", a spokesman said
CDL has committed around $40 million in property tax and rental rebates to tenants in Singapore and overseas since last year.
It noted: "CDL will provide marketing support through CDL eMall, with absorption of onboarding cost, zero commission and free delivery.
CDL eMall is a retail and F&B sales and delivery platform for City Square Mall, Palais Renaissance and Republic Plaza that opened late last year to provide tenants with an online sales channel.
Mr Wee said: "Many retailers do have online payments and delivery processes integrated from last year. However, online transactions typically amount to a very small percentage of their total sales."