Singapore tenants group challenges landlords’ stance, pushes for urgent rental reform to protect SMEs

Date:

Box 1


On 12 June 2025, the Singapore Tenants United For Fairness (SGTUFF) issued a public statement addressing what it described as a systemic crisis in the retail rental environment for small and medium-sized enterprises (SMEs) in Singapore.

Box 2

Published on LinkedIn, the statement was positioned as a direct response to recent landlord narratives regarding rising commercial rents and their impact on tenants.

Though SGTUFF did not mention names, the timing of the post aligns with recent remarks made by Ervin Yeo, Chief Strategy Officer of CapitaLand Group, who discussed retail rent concerns publicly.

SGTUFF, a cooperative representing over 700 local business owners, acknowledged some shared concerns with landlords, including issues around manpower, rising operational costs, and the broader economic climate.

Box 3

However, it sharply criticised what it saw as misleading data narratives and entrenched market structures that obscure the severity of the situation faced by SMEs in the F&B, retail, and service sectors.

The group stressed that unsustainable rent was the single most damaging factor for small local businesses, citing tenancy terms that are inflexible and fail to adjust during economic downturns.

Box 4

Rental costs under scrutiny

Using sarcasm to underscore their point, SGTUFF responded to Yeo’s previous statement about never hearing a tenant complain their rent was too low, saying: “We have never heard any landlord complaining that rentals are too high either.”

The group reiterated that Occupancy Cost (OC) should ideally fall within 5–15% of revenue, depending on business type.

This was supported by comparative data: Link REIT in Hong Kong reported OC of 13.1% across its portfolio, versus 17.1% for CapitaLand Integrated Commercial Trust (CICT) and 16% for Frasers Centrepoint Trust (FCT) in Singapore.

SGTUFF also referenced the 3,047 F&B business closures recorded in 2024 and Q1 2025, alongside a 11 June 2025 Business Times article on rising retail vacancies and churn, to illustrate the growing severity of the issue.

SGTUFF advocated strongly for a revision of existing rental structures, especially in larger malls.

It proposed replacing the high fixed-rent model with one based on a lower base rent and a higher turnover component—arguing this would cushion businesses during revenue dips while also aligning landlord incentives with tenant success.

The group illustrated this with a scenario where an F&B business could survive a sudden downturn more sustainably if rent liabilities adjusted automatically with turnover.

SGTUFF urges government to rethink national land use policy

SGTUFF outlined both short-term and long-term measures aimed at easing the burden on SMEs.

Short-term proposals include:

  • Rental renewal caps indexed to inflation;
  • A turnover-based rental structure for large landlords;
  • Penalties on landlords for keeping shop spaces vacant;
  • Foreign worker quota or levy relief for small local businesses.

Long-term proposals include revisiting national land use policy and urban planning strategy to ensure more retail spaces are made available for socially conscious entities, cooperatives, and local SMEs.

Disputing use of rent yield as a metric

While landlords cite yield-based metrics to justify rent levels, SGTUFF countered that Occupancy Cost is a more suitable measure for small tenants’ sustainability.

The group emphasised that yield targets should not give larger businesses unfair advantages, especially as smaller players typically lack the financial resilience to weather prolonged downturns.

SGTUFF warned that the influx of large, foreign-backed players—especially Mainland Chinese enterprises with extensive supply chains—further intensifies competition, leaving local SMEs at a disadvantage.

Data aggregation conceals real impact

The tenants’ group raised concerns over how aggregated data from SingStat, URA, and REITs could mask the plight of smaller tenants.

They cited a poll of 109 SMEs in the F&B, retail, and service sectors, which found that 96% had never been offered rent reductions over the past five years.

According to SGTUFF, average Occupancy Cost figures are distorted by big players such as FairPrice, Sheng Siong, Uniqlo, and Don Don Donki—who benefit from preferential rental terms and large revenues.

The group also noted that discounting and promotions by desperate tenants further inflate revenue figures, leading to misleading OC calculations.

Demanding better data transparency

SGTUFF proposed that public data sets should be disaggregated to:

  • Differentiate between SMEs and non-SMEs;
  • Separate local from foreign-owned businesses;
  • Break down data by development, floor space, and business type.

Such transparency would, the group argued, mirror URA’s approach to residential market data and provide a clearer understanding of the real rental burden borne by small businesses.

Historic concerns on rental pricing date back over a decade

SGTUFF pointed out that government concerns around rental pricing date back over a decade.

In 2014, the Ministry of Trade and Industry commissioned a study titled Have REIT Acquisitions Led to an Increase in Retail Rents?, and in 2015, the Singapore Business Federation introduced the Fair Tenancy Framework—both reflecting pre-existing tensions.

The group lamented the failure of these initiatives due to poor support from private landlords.

This lack of progress, they argued, forced SMEs to lobby for government intervention during the COVID-19 pandemic, which eventually led to the Lease Agreements for Retail Premises Act 2023.

While critical of systemic imbalances, SGTUFF clarified it does not view landlords as adversaries.

They acknowledged that landlords, as profit-driven entities, operate rationally within a framework that currently enables exploitative dynamics.

The statement concluded with a call for good-faith dialogue, grounded in transparent data and a shared understanding that tenant and landlord success must be mutual.

The post Singapore tenants group challenges landlords’ stance, pushes for urgent rental reform to protect SMEs appeared first on The Online Citizen.



Source link

Box 5

Share post:

spot_img

Popular

More like this
Related

Hassler Roma    – SilverKris

Hassler Roma is a five-star escape where world-class...

Court doubles jail term for man who killed community cats by throwing them from HDB blocks

SINGAPORE: A man who subjected five community cats...

Porsche Design Tower Bangkok Partners with List Sotheby’s to Venture into Japanese Ultra-luxury Market

Successful Tokyo Roadshow Event Introduces Asia’s Unparalleled Ultra-Luxury...

The St Regis Rome    – SilverKris

With over 130 years of legacy behind it,...