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Under the new Solidarity Budget, there will be more rental reliefs, while a new Bill will also help businesses and individuals to defer loan repayments and rents.
Office, industrial, and agricultural tenants of Singapore’s government agencies will get more rental reliefs in the form of rental waivers under the new Solidarity Budget that was revealed on 6 April (Monday), reported The Business Times.
The rental waiver will be increased to one month from the half month waiver initially announced by Deputy Prime Minister and Finance Minister Heng Swee Keat under the Resilience Budget.
As for stallholders in hawker centres managed by the National Environment Agency (NEA) or NEA-appointed operator, they will continue to receive rental waivers for three months, while the commercial tenants of government agencies will still have their rents waived for two months.
Heng already revealed earlier a property tax rebate of up to 100% for non-residential properties for tax payable in 2020. For most properties, such rebates equates to slightly more than one month of rent.
Aside from such rental waivers, the Minister for Law will also introduce a Bill requiring businesses and individuals to defer certain contractual obligations, including the payment rent, repayment of loans, or completion of work during the outbreak.
“Although details on the new bill to defer contractual obligations are not available yet, this is likely to be the most anticipated development for retailers,” said Wong Xian Yang, Associate Director, Research, Singapore and Southeast Asia, Cushman & Wakefield.
Wong noted that though retailers will eventually have to pay the deferred rents, the bill “will give a lot of breathing space to retailers given that rents can make up around a third of business costs.”
This Bill will likewise ensure that property owners will pass the property tax rebate in full to their tenants, which will translate to more rental savings on the part of the tenants.
On the other end, for the landlords, Wong believes that some landlords may opt to commit more rental rebates provided that tenants will not defer their payments.
This is because “landlords still need to service their mortgage loans, which consist of interest costs and principal repayments”, Wong explained.
“Unless landlords are also getting a reprieve from the banks, their short-term cashflow would also be impacted,” he concluded.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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