CapitaLand offers tenants rental rebates; retail, F&B bodies urge other landlords to follow suit

CapitaLand offers tenants rental rebates; retail, F&B bodies urge other landlords to follow suit

The deal would give CapitaLand assets under management of more than Sg$116 billion
File photo of real estate developer CapitaLand's logo. (Photo: AFP/Theresa Baraclough)

SINGAPORE: About 1,000 tenants in urban and suburban malls have been offered rental rebates by CapitaLand, Singapore’s biggest mall operator, the Restaurant Association of Singapore (RAS) said on Thursday (Mar 5). 

The RAS, citing a letter issued to tenants on Wednesday, said CapitaLand has reviewed sales and footfall data for February and will “grant a rental rebate of 50 per cent on the fixed components of (tenants’) one-month gross rent".

This will be disbursed in two tranches of 25 per cent each in April and May.

There will be no change to the computation of additional rent, which will continue to be based on tenancy agreements, RAS added in a Facebook post.

Tenants at CapitaLand malls already can use part of their security deposits to offset their rents for March, according to the property giant’s earlier announcements of relief measures which also include shorter operating hours and a one-time rental rebate of up to half-a-month for eligible tenants.

RAS, which earlier this week said it was “deeply disappointed” with landlords for being slow to act on virus-support measures, described CapitaLand's latest move as a “gesture which will be remembered”.

“CapitaLand’s move to reach out to some 1,000 of its tenants yesterday is an appreciated gesture in helping tenants keep their operations going and saving the livelihoods of their employees,” said RAS president Vincent Tan.

Mr Tan hopes other landlords “will also step up to the plate” and “respond immediately” with help for their smaller tenants.

A CapitaLand spokesperson said in response to CNA's queries: “CapitaLand has 3,500 leases in its Singapore shopping mall portfolio. Rental rebate will be granted in a targeted manner, as COVID-19 has impacted different malls and trade categories by varying degrees.

"We are progressively informing our retailers of their relief packages."

READ: Restaurant association ‘deeply disappointed’ with landlords for not delivering on rental rebates

Among the F&B operators that received news from CapitaLand on Wednesday include Katrina Group, which owns F&B brands such as Bali Thai and So Pho.

Its chief executive Alan Goh told CNA that his stores located in CapitaLand’s urban malls had initially received a 10 per cent rebate for two months, while those operating at Clarke Quay got 15 per cent for two months.

These have now been revised to 50 per cent for two months across his 12 stores in CapitaLand malls.

“We are thankful to them for responding to our calls,” said Mr Goh.

Separately, the Singapore Retailers Association (SRA) said it is “heartened” to hear about the relief measures from CapitaLand.

The latest rental rebates for two months, alongside the offsetting of March's rental payments with security deposits, "will provide a huge lifeline in easing the cashflow issues many retailers are facing", it said in a statement posted on Facebook.

It also urged other mall developers to follow suit with rental rebates and increased marketing efforts.

READ: 'If this goes on, I might quit': Mall tenants want rental rebates soon to counter COVID-19 hit

Mr Logan Wong, founder of Pure Senses which is the distributor of Yankee Candle in Singapore, said he received emails about rental rebates from the leasing teams of Plaza Singapura and Junction 8 – both operated by CapitaLand – on Wednesday night.

Mr Wong also received an email from his landlord at Paya Lebar Square.

When contacted, Paya Lebar Square said it has extended a 10 per cent rental rebate to “most” of its F&B and retail tenants for the month of April.

Mr Wong said: “Though the amount of rebate is less than what we had formally requested based on the concessions Jewel had given to their tenants, we still deeply appreciate the gesture and will like to thank them for their partnership."

RENTAL REDUCTIONS FOR SUNTEC CITY'S TENANTS

Those operating out of Suntec City will also enjoy some rental relief.

Its property manager APM Property Management told CNA that it will “fully pass on the savings” from the Government’s property tax rebate to “qualifying tenants in the form of rental reductions for the month of March and April”.

“We are also finalising the additional rental relief measures and will reach out to the affected tenants regarding the targeted measures as individual tenants are impacted differently by COVID-19,” said APM Property Management’s deputy chairman Anthony Yip. 

“We will progressively reach out to the affected tenants by this week and will inform all affected tenants before the end of March.”

In the meantime, tenants can opt to draw down one month’s worth of security deposits to offset rental payment for March, or operate for shorter hours to reduce operating costs.

Tenants with immediate liquidity needs can also tap on a S$8 million SME Help Fund that was recently set up by ARA Asset Management, Straits Trading Company and JL Family Office, said Mr Yip. APM is the property management arm of ARA Asset Management.

THE DEBATE OVER RENTAL RELIEFS

These mark the latest developments in a week which has seen tenants and landlords at odds over how much support should be given amid a downturn caused by COVID-19.

Two weeks ago, Deputy Prime Minister Heng Swee Keat announced a 15 per cent property tax rebate for landlords of private commercial properties in his Budget statement. The rebate was part of a special S$4 billion package to help businesses affected by COVID-19, and Mr Heng had urged landlords to translate that into lower rents.

Following that, several mall owners announced that they were committed to passing on the property tax rebate fully to tenants, on top of other relief measures that ranged from rental relief for "qualifying tenants" to promotional strategies like free parking to woo shoppers.

But RAS on Monday said many F&B operators had "yet to receive any offers or confirmation” of these rebates. This issue was raised in Parliament a day later, prompting Trade and Industry Minister Chan Chun Sing to say it would be “very short sighted” for landlords not to pass on benefits to their tenants.

READ: Landlords should do their part for retail tenants amid COVID-19 outbreak: Chan Chun Sing

Tenants have said that rental reliefs are what they need most to tide through the drastic drop in revenue amid the ongoing novel coronavirus outbreak. Some said they need to know more details about the relief measures so as to make plans for cash flow and other needs.

But one reason for the delay in details, according to several mall operators, is that they too are waiting for clarity on whether they qualify for the property tax rebate, particularly for integrated developments with both office and retail components.

CapitaLand is "still in the process of clarifying the qualifying criteria" for the property tax rebate, RAS said on Thursday citing the letter issued to tenants.

"But it assures tenants that they will pass on the full property tax rebate once (they) receive it."

Paya Lebar Square said in its emailed response: “Upon the Budget announcement on Feb 18, we immediately informed our tenants that we will pass on fully the property tax rebate to them upon receiving them.

“However, according to IRAS (Inland Revenue Authority of Singapore) , the property tax rebate will only be given some time end-May 2020.”

Source: CNA/sk

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