Disincentives for Commerical Property Vacancies and Enhancing Transparency of Retail Market Data
Ministry of National DevelopmentSpeakers
Summary
This question concerns whether market-based disincentives effectively deter commercial property vacancies and if more granular, localized retail rental data can be published monthly. Mr Shawn Loh inquired about vacancy thresholds for government intervention and the availability of unit-level data across different property types to assist tenants in negotiations. Minister Chee Hong Tat responded that vacancy rates remain stable because holding costs and forgone income naturally discourage landlords from leaving properties vacant for long periods. He explained that the Government monitors various market indicators rather than a specific vacancy threshold, which fluctuates across different property segments and cycles. Minister Chee Hong Tat concluded that the Urban Redevelopment Authority already publishes detailed quarterly rental and vacancy data by location and property type to support informed business decisions.
Transcript
55 Mr Shawn Loh asked the Minister for National Development (a) whether the Government's position that property vacancies are adequately deterred by market-based disincentives such as holding costs and forgone income applies similarly across (i) different commercial property types, such as shophouses, strata retail, and older malls and (ii) is different for residential developers; and (b) what is the vacancy percentage or duration threshold above which the Government will intervene.
56 Mr Shawn Loh asked the Minister for National Development whether the Government can make freely available more localised retail rental data at the unit-level, similar to residential transaction data, in order to provide tenants with more clarity for business planning and renewal negotiations.
57 Mr Shawn Loh asked the Minister for National Development whether the Government can publish retail rent and vacancy trends on a monthly basis at a more granular level (i) by URA Planning Area, (ii) across different property types such as shophouses, centrally-managed malls, strata retail, HDB sold shops, and (iii) by property sizes, to better inform public discourse.
Mr Chee Hong Tat: Vacancy rates for commercial and residential properties have generally remained stable over the past three years. Landlords of both commercial and residential properties are unlikely to leave their properties vacant for too long, given the costs and forgone rental income of doing so.
The Government considers a variety of factors when assessing the state of the commercial and residential market, including property market indicators, as well as the broader economic outlook. Focusing solely on vacancy rates may not be appropriate as they can vary across property segments and over time due to cyclical shifts in demand.
The Urban Redevelopment Authority publishes detailed rental data every quarter by geographical location and property type, as well as information on vacant commercial properties by geographical location. This helps the public and businesses to make more informed leasing or business decisions.