SMEs want rules to ensure fair rents

[Big Toe]

'Highest bid wins' policy is here to stay.
There maybe exceptions to the rule but those belong to the minority. (farming for food security, oil/gas for energy security)
The objective of this is to only allow businesses that has a very high value add content to survive.
Government has clearly spelt out, if we need good paying jobs, this is the only way to go.

If we wish to start business in Singapore, it's a fact we have to accept, much like when
we decide to buy a new car, it is associated with very high cost. We can see this even in the retail
industry, coffee shops/ super markets are going 24hrs to fully utilize the space.

Depending on what business a person wishes to set up, it maybe wiser to set up a business in a lower cost country.
Or the start up can choose to provide a service to the local population(something that cannot be outsourced to a third party residing outside Singapore), this way, he/she is competing with existing companies on a more level playing field.

[Lancelot]

Unless we are socialist country, otherwise can continue to dream about it. Miracle does happen.

[Stephysim]

Its just singapore....

Will the suggestion to "nationalize" mall emerge, due to "outsize" profit from mall owners?

It seems market forces failed pretty often in Singapore, and always seeking help from "ah gong" (government)

May be should add a topic to my reading list, is this a global trend, or just Singapore unique?

[Stephysim]

SMEs here seem to face many problems.. there isn't enough support it seems.

[Lancelot]

Gov always try to help , even for start-up but end up being abused by some . MDA was very generous to start-up but many youngsters took the grants and enjoy the ''fruits'' immediately after grants were approved.

[opmi]

Some Singaporeans are delusional if they think that MNCs will continue to hire them as 'adminstrator/paper shufflers' at ever rising costs. With globalisation and digitalization, their jobs can be done by someone sitting at Bangalore or Makati hi tech business park.

Unless the Govt is willing to hire everyone when the MNCs leave SG due to high and increasing costs, Govt should build a more sustainable business environment for SMEs to create a diversity of jobs.

'Highest bid wins' policy is here to stay.
There maybe exceptions to the rule but those belong to the minority. (farming for food security, oil/gas for energy security)
The objective of this is to only allow businesses that has a very high value add content to survive.
Government has clearly spelt out, if we need good paying jobs, this is the only way to go.

If we wish to start business in Singapore, it's a fact we have to accept, much like when
we decide to buy a new car, it is associated with very high cost. We can see this even in the retail
industry, coffee shops/ super markets are going 24hrs to fully utilize the space.

Depending on what business a person wishes to set up, it maybe wiser to set up a business in a lower cost country.
Or the start up can choose to provide a service to the local population(something that cannot be outsourced to a third party residing outside Singapore), this way, he/she is competing with existing companies on a more level playing field.

[opmi]

Gov always try to help , even for start-up but end up being abused by some . MDA was very generous to start-up but many youngsters took the grants and enjoy the ''fruits'' immediately after grants were approved.

That due to poor adminstration by the regulating authority. PIC grant is one big glaring example of poor monitoring and loose guidelines. But I dont know if it is deliberate to give the receipents more free-play.

[orangetea]

That due to poor adminstration by the regulating authority. PIC grant is one big glaring example of poor monitoring and loose guidelines. But I dont know if it is deliberate to give the receipents more free-play.

I can see the service provides' inflate' the cost of internet charge, it equipment, productivity services and plainly offer to businesses that under PIC, they can get grants...

Looking at it another way, these companies' aim is to make money from government instead of genuinely and organically growing by competition via best price and service.

I know the govt meant well and want to assist sme but the rules of have min. 3 cpf contributing employees does not make sense.

Micro sme cannot get grants if its run by one or two persons. Employing another is out of question because staff costs is much higher than fixed costs.

[greengiraffe]

A good gesture to a small part of the SME segment... sweetening the ground for next GE...

Long-time HDB shop tenants get breather

They have up to 2019 to decide on transfer of business premises
Published on May 3, 2014 1:15 AM


Furniture shop owner Chen Foon Kee is one of 7,100 long-time HDB shop tenants who will benefit from the longer grace period. -- ST PHOTO: MARK CHEONG

By Charissa Yong

A RECENT rule to curb speculation in the Housing Board commercial and industrial rental market has been effective so far, and the authorities are extending a concession to long-time tenants.

Last October, the HDB banned new tenants from transferring such rental premises to others for a cash premium, known as an assignment fee.

Business owners "assign" their properties to others because they are not doing well, or can profit from the transfer of a popular place.

Since the rule last October, average transfer fees have fallen 33 per cent for HDB commercial property and 42 per cent for industrial property, said National Development Minister Khaw Boon Wan yesterday.

ERA Realty key executive officer Eugene Lim said: "This shows that the policy has been successful in doing its job of curbing rising operating costs and speculation in HDB rental commercial and industrial properties."

While stepping in to curb speculation, which may ultimately lead to higher costs for consumers, HDB had also given old-timer tenants a grace period of three years, up to 2016, to transfer their shops or industrial property.

It is now extending this by three years. This means tenants who qualify now have until 2019 to decide.

The concession applies to existing commercial and industrial tenants who have been renting from HDB for at least 15 years as of last Oct 16.

There are about 7,100 of them, three in four of whom are aged 55 and above.

They make up 40 per cent of HDB's commercial and industrial tenants.

The decision was made in response to feedback given to HDB over the last few months from various groups of tenants, Mr Khaw wrote on his blog.

"Some tenants who have been operating out of the same premises for many years asked HDB for a longer grace period, to give them more time to make business adjustments," he said.

A significant proportion of them will in fact be retiring in a few years' time, or would be near retirement then, he added.

"I hope the extended grace period would better help them make the necessary business adjustments to dovetail with their retirement plans. This concession is a good way to recognise their many years of serving the local community," he said.

ERA Realty's Mr Lim said that previously, commercial space assignment fees averaged around $150,000, with those for clean and light activities about $40,000 to $50,000.

The fees for food factories and car workshops can be about $100,000 to $200,000.

Old-timer tenants welcome the extension, which they say gives them more time to decide on their businesses.

"To me, three years was too short because my health and spirit are still very good now. I still can keep running my shop," said furniture shop owner Chen Foon Kee, 66. He has been running his Bukit Merah Lane business since 1979.

The news was also welcomed by Federation of Merchants' Associations Singapore president Yeo Hiang Meng, who said it gave existing tenants more time to look for new tenants.

"The original idea of assignment fees was good, except certain groups of people used it as a way to speculate and that pushed up the rentals," said Mr Yeo.

"Now, new tenants have longer-term plans," he added.

[email protected]

Background story

FALL IN AVERAGE TRANSFER FEES

HDB commercial property

33%

HDB industrial property

42%

[specuvestor]

'Highest bid wins' policy is here to stay.
There maybe exceptions to the rule but those belong to the minority. (farming for food security, oil/gas for energy security)
The objective of this is to only allow businesses that has a very high value add content to survive.
Government has clearly spelt out, if we need good paying jobs, this is the only way to go.

If we wish to start business in Singapore, it's a fact we have to accept, much like when
we decide to buy a new car, it is associated with very high cost. We can see this even in the retail
industry, coffee shops/ super markets are going 24hrs to fully utilize the space.

Depending on what business a person wishes to set up, it maybe wiser to set up a business in a lower cost country.
Or the start up can choose to provide a service to the local population(something that cannot be outsourced to a third party residing outside Singapore), this way, he/she is competing with existing companies on a more level playing field.

yes highest bidder wins is still a baseline to ensure competitiveness but like OPMI said it can be tweaked with govt policies.

In fact it has already been tweaked. If go by highest bidder wins then all the downtown shops would be replaced by KTVs and pubs.