Property developer CapitaLand has said it will give back S$41.5 million in rental rebates to existing retail, commercial and industrial tenants.
This will effectively mean a 4 per cent reduction in rentals on average.
The developer is passing on the savings it received from the government’s Budget announcement last week.
Finance Minister Tharman Shanmugaratnam had said the government is giving a 40 per cent property tax rebate for industrial and commercial properties in 2009.
It also urged landlords to pass on the benefits of the rebate to tenants.
Liew Mun Leong, president and CEO, CapitaLand Group, said: “CapitaLand will pass through 100 per cent of the rebate to the retailers…if the retailers do not survive, we also cannot survive.”
CapitaLand’s retail tenants currently pay rents ranging from S$5 to over S$30 per square foot, depending on location and size of units.
The company declined to say how much commercial rents are, but it is understood these could be up to some S$18 per square foot a month, depending on location, grade of office space and the time at which the lease was signed.
CapitaLand owns or manages close to 6 million square feet of commercial and industrial floor space in Singapore.
It also operates 18 malls in Singapore, including ION Orchard, Raffles City, Bugis Junction, Tampines Mall and Plaza Singapura.
Retailers have welcomed the move.
Daniel Yeo, managing director, Comics Connection, said: “What is very important is the cash flow, I can use it for the cash flow. I can use part of it to send my staff for training.”
CapitaLand has spent at least S$600 million since 2002 to develop its malls to utilise space.
It said it will continue to focus on enhancing its assets.
CapitaLand plans to concentrate on the Plaza Singapura and [email protected] developments along the prime Orchard Road shopping belt next.
Source : Channel NewsAsia – 29 Jan 2009