Forum: Malls should take long-term view and give rental rebates

The Food Junction foodcourt at Bugis Junction on Sept 2, 2019.
The Food Junction foodcourt at Bugis Junction on Sept 2, 2019.PHOTO: ST FILE

The passing on of property tax rebates of 15 per cent, as promised by landlords to retailers, will come too little too late to save many of Singapore's small business operators, who have clear and present financial commitments to make good every week, if not every day (F&B outlets still waiting for promised rental rebates, March 3).

Even as a real estate investment trust investor with vested interests in the maintenance of a high rental yield policy, it is obvious that the longer-term preservation and maintenance of functioning businesses in the malls is more important than the short-term collection of contractually agreed-upon rentals.

As it is, the mood and ambience of Singapore's malls are depressing, with footfall down so cataclysmically, but with shops potentially closing from repossession because rental payments cannot be made, the situation will deteriorate and drive shoppers even more towards shopping online.

Just where does that leave mall operators, then?

Offering a few hours of free parking will not on its own draw shoppers to a mall which looks like it is in its death throes.

Like governmental policies which look after jobs more so than workers, malls should be more concerned with helping shops with viable businesses survive during these desperate times than with rental collection.

First, a meaningful rental discount is in order. Then, landlords who have traditionally taken a percentage of gross income from shop operators over and above contractual rental fees should give further rebates based on the percentage decrease in business takings.

Bite the bullet now; when sales improve, rentals can always be clawed back proportionally.

Yik Keng Yeong (Dr)

Even as a real estate investment trust investor with vested interests in the maintenance of a high rental yield policy, it is obvious that the longer-term preservation and maintenance of functioning businesses in the malls is more important than the short-term collection of contractually agreed-upon rentals.

A version of this article appeared in the print edition of The Straits Times on March 05, 2020, with the headline 'Malls should take long-term view and give rental rebates'. Print Edition | Subscribe