Ensuring Commercial Rent Affordability for SME Tenants at JTC and HDBs
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the oversight of commercial rent affordability and tenant-mix diversity for SMEs within JTC and HDB properties. MP Kenneth Tiong Boon Kiat asked how the Government ensures rental affordability and reconciles SME support with commercial operations. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong explained that JTC industrial rents average 10% below market rates and 90% of HDB commercial rents have remained stable for five years. He noted that while no controls exist for tenant mix by business size, the majority of tenants are SMEs who receive staggered rent adjustments and rental discounts. He further highlighted that SMEs are supported holistically through the Enterprise Financing Scheme, the Enterprise Development Grant, and the Productivity Solutions Grant.
Transcript
75 Mr Kenneth Tiong Boon Kiat asked the Deputy Prime Minister and Minister for Trade and Industry (a) what oversight ensures (i) commercial rents by landlords, such as JTC and HDB, remain affordable for SME tenants and (ii) that tenant-mix diversity by gross-floor-area includes a substantial share of SMEs or local brands; and (b) if not, how does the Government reconcile SME support with allowing purely commercial operations.
Mr Gan Kim Yong: The JTC Corporation (JTC) and Housing and Development Board (HDB) have frameworks in place to ensure that competitive rents are offered to tenants, including small and medium enterprises (SMEs). JTC also monitors industrial rents closely to guide the release of new industrial land plots to meet the demand for industrial land and space. Industrial rents for JTC's developments are currently at an average of around 10% below prevailing market rates. Similarly, commercial properties let out by HDB are generally priced below market rates, and 90% have not seen an increase in rents in the last five years.
Both JTC and HDB offer staggered rent adjustments for eligible tenants that are renewing their leases, to help them manage increases in rentals. HDB also has schemes in place to support startups and social enterprises by providing rental discounts.
Currently, the majority of JTC's and HDB's tenants are SMEs. JTC and HDB do not impose controls on tenant mix by business size or ownership.
The Government will continue to support SMEs holistically through a comprehensive suite of measures, such as the Enterprise Financing Scheme, which supports businesses by sharing the risk on loans extended by Participating Financial Institutions. There are also schemes, such as the Enterprise Development Grant and Productivity Solutions Grant, to help businesses upgrade and improve their productivity.