SMEs want rules to ensure fair rents

[countonme]

SMEs should know what industries they r in, not all industries can make it in Singapore. Finance, f&b, renovations r booming sectors. Gov simply cannot make everyone happy. They Hav to attract the highly paid FTs to work and MNCs to open HQ here. And to feed these people, service people r needed esp good English speaking ones, eg pinoys Hav advantage. Sme shld really adjust their business to align w gov's direction to survive.

[investor101]

As a serious REITs owner, having rent controls is not in my best interests.

I once wanted to rent a HDB shophouse (shop below, HDB flat above) to do some business. The current tenant wanted to transfer the lease over to me for $120k. As a newbie back then, I thought it was a good deal as I would get a good shop space for only $120k. The agent was then nice enough to educate me that even after paying the $120k, I still needed to pay the monthly rent as I was only a tenant of HDB, not a real property owner.

I told the agent that there was no way I would pay a single cent for the transfer, since the transfer does not give me any kind of property ownership. What was I then paying for? To help the previous owner cover his own transfer fees?

After some negotiation, I manage to contact the "owner". Told me that I would take the property off his hands if he paid me $10k. Reason being that I was freeing him of his obligation to pay the monthly rent to HDB, and giving him the chance to walk away from his failing business. If not, why bother to close it? Of course by this time, I was no longer interested in his property. Just wanted to tell him off for his ludicrious idea of even asking me to pay $120k for a property that he doesn't even own.

In the end, I switched my business to a home-based one. Saves me on the rent.

[Big Toe]

Investor 101, $120K is considered a very very very reasonable transfer sum for a HDB shop house, especially if the location is ideal and rent is reasonable for the trade you are in. Coffee shops are transferred in millions. The alternative is to bid for it. I.e. paying $40K/mth for a 200sqm mini mart. No direct HDB tenant would quote a $10K transfer fee unless the rent is sky high and is in the worst of location. The cheapest standard HDB shophouse with less than desirable location/traffic cost an average of ard $2M to own and that's with limited lease left( At $2M, interest rate of 2.5%, we are looking at an interest of >$4K/mth).

Fact is that there is a decreasing number of HDB shops.(Old ones torn down, less new ones are built). HDB shops in general are a bargain compared to shopping centres and there is an assured catchment area. It is very very much sought after, especially the ones located in new towns. HDB shops are in fact, much more desirable than private estate shops due to the higher population density present in the heartlands. And the big retail players(i.e. supermarkets) are willing to pay a very high premium for suitable HDB shops.(in transfer fee/rental/ownership)

In any case I do not own any HDB shop.(But I wish I did) I do think that it is the only bright spot in the property market. Office/residential/industrial... can you see the avalanche of supply/waning demand? And the thing about retail space is this, there is just no alternative, a retail space is a retail space. You can't convert office/residential to retail even though it is somewhat possible for industrial space(ground floor) to somewhat serve as showroom/retail space.

[opmi]

Investor 101, $120K is considered a very very very reasonable transfer sum for a HDB shop house, especially if the location is ideal and rent is reasonable for the trade you are in. Coffee shops are transferred in millions. The alternative is to bid for it. I.e. paying $40K/mth for a 200sqm mini mart. No direct HDB tenant would quote a $10K transfer fee unless the rent is sky high and is in the worst of location. The cheapest standard HDB shophouse with less than desirable location/traffic cost an average of ard $2M to own and that's with limited lease left( At $2M, interest rate of 2.5%, we are looking at an interest of >$4K/mth).

Fact is that there is a decreasing number of HDB shops.(Old ones torn down, less new ones are built). HDB shops in general are a bargain compared to shopping centres and there is an assured catchment area. It is very very much sought after, especially the ones located in new towns. HDB shops are in fact, much more desirable than private estate shops due to the higher population density present in the heartlands. And the big retail players(i.e. supermarkets) are willing to pay a very high premium for suitable HDB shops.(in transfer fee/rental/ownership)

In any case I do not own any HDB shop.(But I wish I did) I do think that it is the only bright spot in the property market. Office/residential/industrial... can you see the avalanche of supply/waning demand? And the thing about retail space is this, there is just no alternative, a retail space is a retail space. You can't convert office/residential to retail even though it is somewhat possible for industrial space(ground floor) to somewhat serve as showroom/retail space.

these assignment fees added to the cost and financing of the property, which in turn translate to higher rentals and eventually higher selling price of end-products.

This is an example of asset-inflation-CPI inflation feedback loop. Also part of reason why PAP Govt cannot tame CPI inflation with stronger SGD policy alone. PAP Govt is unwinding the "Singapore Inc" policies of 90s regime.

[Freenasi]

I thought they (hdb) have implemented curb on this assigning of hdb units from one to another? i think this is definitely one way of kicking the snowball and have it getting bigger and bigger, rental will keep going up if speculators are allowed to bid and re-assign hdb shophouses etc. Remeber the mega-million dollars coffee shop in hougang? Its sure one way to inflate the kopi and mee-pok price.

[CityFarmer]

I thought they (hdb) have implemented curb on this assigning of hdb units from one to another? i think this is definitely one way of kicking the snowball and have it getting bigger and bigger, rental will keep going up if speculators are allowed to bid and re-assign hdb shophouses etc. Remeber the mega-million dollars coffee shop in hougang? Its sure one way to inflate the kopi and mee-pok price.

The difficulty in paying the high rental faced by bigger player e.g. ShengSiong (SS), shows the severity of the issue. If the trend is mitigated, than it might be a good news for SS. SS focuses on non-mall retail space, especially HDB shops.

(vested in SS)

[Temperament]

I thought they (hdb) have implemented curb on this assigning of hdb units from one to another? i think this is definitely one way of kicking the snowball and have it getting bigger and bigger, rental will keep going up if speculators are allowed to bid and re-assign hdb shophouses etc. Remeber the mega-million dollars coffee shop in hougang? Its sure one way to inflate the kopi and mee-pok price.

All Govs.need a little inflation every year. But food prices should be kept as affordable as possible; Especially for the lowly paid wage workers.

The last time, me & family touring Margaret River, we found the prices of food were exhortbitantly expensive until we found an eating place for "Truck Drivers".
Not only the food were reasonably priced but also deliciously authentic "western food".(We can't get the same taste of western food in Singapore).
Funny, we were tourists, definitely didn't look a bit like Australia Truck Drivers. But they let us eat there whenever we wanted. No questions ask.
I wonder is the eating house still existed in Margaret River?
If so, still welcome everyone not looking a bit like Truck Driver?

[yeokiwi]

But food prices should be kept as affordable as possible

Then hawkers how? No pay increase??
Supermarket staffs?
Food processing industry??

If there are means to help the lowly paid wage workers to upgrade their skills for higher pay, the society should do it. If the skill set/productivity for the particular job is already at the limit, then we have to look into revising their salary or provide more subsidies for their work done.

I do not mind to pay 50cts for a clean toilet in hawker center. I do not mind either if the gov wishes to subsidise 30cts.

[Temperament]

Ha! Ha!
Do you know at a certain market hawker center, a stall run by NTUC afflicted is selling a plate of rice with a combination pork or fish , vegetable and egg or fishcake or luncheon or chicken nuggets for only 2 dollars. But it is for NTUC members only. i think for senior citizens too. i am not so sure.
Open to tourists?
My foot?
Not even to you.
Is NTUC also the PAPIES?
Even "slightly cheaper" plain food need to be "NTUC MEMBERS".
So without doubts, you are always right so far about our G's stinginess or (narrow mindedness aka no welfare unless you are "qualified members", even with very , very little "subsidies").

[specuvestor]

Investor 101, $120K is considered a very very very reasonable transfer sum for a HDB shop house, especially if the location is ideal and rent is reasonable for the trade you are in. Coffee shops are transferred in millions. The alternative is to bid for it. I.e. paying $40K/mth for a 200sqm mini mart. No direct HDB tenant would quote a $10K transfer fee unless the rent is sky high and is in the worst of location. The cheapest standard HDB shophouse with less than desirable location/traffic cost an average of ard $2M to own and that's with limited lease left( At $2M, interest rate of 2.5%, we are looking at an interest of >$4K/mth).

Fact is that there is a decreasing number of HDB shops.(Old ones torn down, less new ones are built). HDB shops in general are a bargain compared to shopping centres and there is an assured catchment area. It is very very much sought after, especially the ones located in new towns. HDB shops are in fact, much more desirable than private estate shops due to the higher population density present in the heartlands. And the big retail players(i.e. supermarkets) are willing to pay a very high premium for suitable HDB shops.(in transfer fee/rental/ownership)

In any case I do not own any HDB shop.(But I wish I did) I do think that it is the only bright spot in the property market. Office/residential/industrial... can you see the avalanche of supply/waning demand? And the thing about retail space is this, there is just no alternative, a retail space is a retail space. You can't convert office/residential to retail even though it is somewhat possible for industrial space(ground floor) to somewhat serve as showroom/retail space.

these assignment fees added to the cost and financing of the property, which in turn translate to higher rentals and eventually higher selling price of end-products.

This is an example of asset-inflation-CPI inflation feedback loop. Also part of reason why PAP Govt cannot tame CPI inflation with stronger SGD policy alone. PAP Govt is unwinding the "Singapore Inc" policies of 90s regime.

ya investor101 actually we do that all the time. Selling our L99 house at inflated prices

So the phenomenon of paying higher prices for "prepaid expenses" is not restricted to commercial leases. Implied housing rental cost, which is big part of our CPI, and rightly so, affects our cost of living as well.