- POSTED: 02 May 2014 21:07
- UPDATED: 02 May 2014 22:59
The Singapore Business Federation (SBF) wants to get landlords and businesses together to the table, to work out a rental code of practice. It said this will provide a platform for both parties to meet in the middle, and can help prevent rental transaction abuses.
SINGAPORE: The Singapore Business Federation (SBF) wants to get landlords and businesses together to the table, to work out a rental code of practice.
It said this will provide a platform for both parties to meet in the middle, and can help prevent rental transaction abuses.
The Association of Small and Medium Enterprises (ASME) also supported the idea of a national information bank on rental rates to improve transparency.
Rising rents for office and commercial space have been a bugbear for businesses in Singapore.
Landlords often jack up rates when tenants renew leases, sometimes raising overheads for firms exponentially.
Businesses generally like it if costs can be kept predictable to some extent.
If there is a way for rental costs to not spike so dramatically, for instance, it would help many enterprises with forward business planning.
A national information bank can help by offering data on rental rates in certain areas.
ASME thinks more visible rental data can discourage landlords from overcharging.
This may fall under a fair tenancy legislation aimed at making effective rent reporting mandatory.
Kurt Wee, president of ASME, said: "It's dangerous if we build an economy that excessively focuses on rent collection and we forget value creation, we forget business value-add - every time value is created, profits are created, it's sucked off by the landlord. I think that's really, really not healthy."
But before reaching the stage where legislation is needed, SBF thinks there could an avenue for landlords and tenants to agree on a framework for sound rental practices first.
Currently, there is no platform for both parties to work out differences on a wider scale.
Cynthia Phua, member of Small and Medium Enterprises Committee at SBF, said: "I've been both a tenant and landlord before. We noted that the small retailers really do not have the bargaining power as compared to a landlord in a big mall, per se.
"So what we wanted to do is to help the small retailers to be aware of these terms and conditions."
The federation wants to work with stakeholders to explore the development and adoption of standardised rental lease terms, with the hope that government landlords can set the tone by being early adopters of the terms.