Singapore retailers call for ‘unprecedented rental relief’
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“Unprecedented rental relief measures” are needed from landlords to help retailers overcome the coronavirus crisis, according to the Singapore Retailers Association. In an open letter to landlords, the association has urged landlords to implement a rental payment structure for six months capped at no more than 15 percent gross turnover or a 50-per-cent base rent reduction, whichever is lower. It also asks landlords to allow retail businesses who cannot sustain their businesses to exit before their lease expiration without losing security deposits or risking punitive legal action.
“We fully realize and appreciate that both mall operators and tenants have been working very hard over the past two months to minimize the business losses from the drastic drop in footfalls,” read the letter signed by Singapore Retailers Association president R Dhinakaran, on behalf of its 400 members.
“However with the government advice of safe distancing and stay at home (heading to malls for essentials like food only) … the sales of the majority of retail stores will be equivalent to zero sales, similar to a lockdown situation.”
The letter asks landlords to exercise the requested measures to avoid massive permanent store closures and loss of jobs within the next three months.
Questions & Answers
Q.What specific rental payment structure has the Singapore Retailers Association proposed to landlords?
What specific rental payment structure has the Singapore Retailers Association proposed to landlords?
The association has urged landlords to cap rental payments at no more than 15 percent of gross turnover, or to implement a 50-per-cent base rent reduction, whichever measure results in a lower payment for retailers.
Q.Beyond rental reductions, what other support measure are retailers asking landlords to provide?
Beyond rental reductions, what other support measure are retailers asking landlords to provide?
Retailers are also requesting that landlords permit businesses unable to continue operating to terminate their leases early without losing security deposits or facing punitive legal actions, helping them exit unsustainable situations.
Q.Why does the Singapore Retailers Association believe these measures are necessary now?
Why does the Singapore Retailers Association believe these measures are necessary now?
With government advice on safe distancing and stay-at-home orders, sales for most retail stores are expected to be close to zero, similar to a lockdown. This situation makes the relief measures critical.
Q.What is the expected outcome if landlords do not implement the requested rental relief measures?
What is the expected outcome if landlords do not implement the requested rental relief measures?
The association warns that without these measures, there is a risk of massive permanent store closures and significant job losses across the retail sector within the next three months.
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