Landlords and tenants need to see each other as long-term partners, share both pain and benefits: Chan Chun Sing
SINGAPORE: Landlords and tenants must see each other as "long-term partners", who share both the pain and the benefits, in good times and bad, said Minister for Trade and Industry Chan Chun Sing on Tuesday (Mar 31).
This means both parties working out how to share the rebates given to them by the Government, said Mr Chan as he spoke to the media on the sidelines of a visit to Swensen's, where he met the senior management of the restaurant chain's parent company ABR Holdings.
"What Enterprise Singapore and the economic agencies have done is to try to bring the tenants and the landlords together and work out how they will share the rebates given to them, assuming that 100 per cent is passed on to them," he explained. "That is something that the tenant and the landlord must work (on) together to work out a sustainable long-term solution."
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Rentals are typically about 20 per cent of the entire cost structure for food and beverage businesses, said Mr Chan.
"Different landlords have different relationships with their tenants, they have different rental models, they have different profit-sharing schemes ... It's not so easy for the Government to intervene and say that everyone should follow this particular formula," said Mr Chan.
Mr Chan's remarks come several days after Finance Minister Heng Swee Keat announced additional support measures for business and households in response to the COVID-19 pandemic.
The unparalleled S$48 billion package, which Mr Heng called a "supplementary Budget", was targeted mainly at workers and businesses, especially those hardest-hit by the outbreak, as well as strengthening economic and social resilience.
This second stimulus package followed an earlier S$4 billion one aimed at stabilising Singapore's economy amid the uncertainties caused by COVID-19.
Among the measures announced in the supplementary Budget, also called the Resilience Budget, was an enhancement of the property tax rebate, which now covers a larger amount and more properties.
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Qualifying commercial properties badly affected by the virus outbreak, including hotels, serviced apartments, tourist attractions, shops and restaurants, will pay no property tax for 2020.
In addition, for businesses in other non-residential properties such as offices and industrial properties, a property tax rebate of 30 per cent will be granted, said Mr Heng, who is also Deputy Prime Minister.
"Our advice to both sides - the tenant side and the landlord side - is that both sides must see each other as long-term partners. Both sides cannot take a short-term perspective in this. The spirit must be that in good times we share the benefits, in tough times, we share the pain," Mr Chan said ."If both the landlord and tenant can work together then we are much nearer to a solution. But this is still work in progress."
With the second stimulus package only recently rolled out, Mr Chan called it "premature" to talk about a third package, as this would depend on further developments.
"It's premature to talk about a third package. It's better for us to focus on utilising the first package, which is the Budget 2020 and the supplementary Budget 2020, and see how we can best make use of the available resources to protect the jobs of our workers and to maintain the businesses that we have at this point of time," he said.
But Mr Chan emphasised that Singapore has the "depth of resources" to do more if the need arises.
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"What we can be assured of is that should we need to do more, we have the depth of resources to be able to do more," he said. "And that should give Singaporeans and international businesses confidence in us for the long term.
"We have been able to do this because over the years, we have judiciously saved up for this rainy day."
Singapore has been working hard to ensure that there are adequate food supplies for its citizens, said Mr Chan, adding that this involves a combination of stockpiling, diversification and local production strategies.
"Previously crises tended to be more localised or regional. Today, this crisis is global," he explained.
"Today when the economic agencies look at our stockpile numbers, we have to constantly keep watch (on) the countries that are approaching a possible lockdown or shutdown and make sure that we take anticipatory moves before the actual shutdown or lockdown happens in that country, for us to develop new sources."
Singapore also needs to be open to alternatives, Mr Chan noted.
"If we are unable to adapt to alternative and substitutes, then we might just be held ransom by those sources that provide us with the original food supply. If we have some degree of adaptability and flexibility, it will strengthen our ability to find different sources," he said.