2 Mar, 2009
Mapletree rejects appeal for rent cuts
Former JTC tenants vexed by refusal despite new landlord's offer to
help them in other ways
By Francis Chan

TENANTS of former JTC Corp factories are vexed at the refusal of the
new landlord, Mapletree Investments, to lower rents in these
difficult times.

A group of 123 bosses - about 90 per cent of the tenants at the Toa
Payoh North Industrial Estate - petitioned Mapletree last December to
cut rents by 25 per cent to 30 per cent.

'They wrote recently and told me they will not accede to our request
for the rent reduction,' said Mrs Lee Yoke Keng, director of UST
Technology, a tenant there since 1974.

Like Mrs Lee, most tenants run small and medium-sized enterprises
(SMEs) that have operated out of the former JTC property since as far
back as the 1970s.

And like most export-driven manufacturing firms, a majority have
reported a fall of 50 per cent to 80 per cent in sales, and are
looking for ways to cut costs.

In response, Mapletree spokesman Shae Hung Yee told The Straits Times
that it had considered the tenants' request but was unable to accede
to the rental reduction. 'We cannot support such an across-the-board
rental cut. We are running a business just like they are.'

Nonetheless, Mapletree - a wholly owned unit of Temasek Holdings - is
trying various other means to help the tenants. These efforts,
however, are cold comfort to SME bosses trying to manage declining
order books and rising business cost amid increasing uncertainty.

The root of their frustrations: Had the property not been sold by JTC
and taken over by Mapletree last July, they would have enjoyed 15 per
cent rental rebates announced during this year's Budget.

As part of the Resilience Package, tenants of JTC, the Housing Board,
the National Environment Agency and the Singapore Land Authority are
entitled to a rental rebate of 15 per cent.

'I've been left out in the cold through no fault of my own,' said Mrs
Lee. 'In the past, JTC's original objective was to provide a
stabilising force in the rental market for industry but now we're
under Mapletree, that becomes meaningless.'

JTC sold $1.7 billion worth of its flatted factories, stack-up
buildings and ready-built assets to Mapletree last July.

'I've cut staff wages and my salary, so surely rental is something my
landlord can work with me on,' said Mrs Lee.

A director of Small Tools Technologies, Mr Dick Lee, who leases five
units at the property, echoed the sentiments. 'We need to let go of
some units because business is not good - I'm down to just 20 per
cent to 30 per cent in sales...but I've got to finish the lease.'

Mr Lee, who employs 130 staff, added: 'I don't want to cut any jobs,
but if there are no orders, what can I do?'

Mr Sim Wee Chuan, managing director of Norton Precision Engineering,
said: 'My orders are down 50 per cent but my rental will be up 10 per
cent in March.'

While Mapletree does not intend to cut rent across the board, it will
be passing on a 40 per cent property tax rebate - announced in the
Budget - in full to tenants. Other measures offered to tenants
include lease restructuring, instalment programmes and finding
replacement tenants for all or part of their spaces.

'We feel this focused approach will better channel our limited
financial resources to cases where help is most needed, rather than
an across-the-board rental rebate,' Ms Shae said.

Tenants The Straits Times spoke to last week said recent lease
renewals had seen rent increases of between 10 per cent and 15 per
cent. Mr Alan Hoong, managing director of Apex Technologies
International, says he has not seen any value-added or improvements
to the property since Mapletree took over, despite the rent hike.

'All you need to do is go to the toilets. There are doors hanging on
one hinge instead of two, flushing systems that are not
working...They have not maintained the amenities.' he said.

Ms Shae says Mapletree is working on building improvements and asset
enhancements. 'We will announce the initiatives to tenants as and
when we are ready to do so,' she added.

A second petition to Mapletree was started last Friday. The tenants
hope Mapletree will give a 15 per cent rent cut.

1 March 2009
HDB Lease Buyback Scheme kicks off
By Pearl Forss, Channel NewsAsia

SINGAPORE : Singapore's Housing and Development Board Lease Buyback
Scheme started on Sunday, after two years in the works.

Five applications were received in the first hour.

The scheme is designed to help cash-poor, asset-rich seniors meet
their retirement needs.

72-year-old Koh Chiong Eng is afraid he may lose his petrol pump
attendant job soon because of his age.

If that happens, meeting daily expenditure will become difficult, as
his wife does not work.

Hence, they were among the first in Singapore to sign up for the
Lease Buyback Scheme - where HDB buys back the tail-end of the lease
of their flat, leaving them with a shorter 30-year lease.

They will get a first-time payout of S$5,000, and monthly payments of
about S$600 till death. The amount is calculated based on the
estimated valuation of their 3-room flat - at S$236,000.

The payout varies depending on the valuation of the flat, done by
independent assessors.

An estimated 25,000 households are eligible for the scheme, and
concerns have been raised about some seniors' reluctance to part with
their properties. But it is not an issue with Mr Koh.

He said: "I can't take the flat with me if I die. It is better to
sell it to the government and get money to meet my daily needs."

Some seniors are also reluctant because of the Asian value of leaving
property to their children. Commenting on the issue, National
Development Minister Mah Bow Tan said: "I hope at the same time,
their children will also look after them. But you and I know that
this is not a given."

Seniors will get to stay in their homes for 30 years after they sign
up. And if they are still alive after the 30-year lease, alternative
arrangements such as nursing home stays will be made for them.

Mr Mah said: "The benefit of the scheme really is, you stay where you
are and you get a rental income. My instruction to HDB is to make
sure that as many eligible elderly households as possible are
familiar with the scheme."

So HDB will organise exhibitions at 11 towns with a high elderly
population. Officers will also go door-to-door to invite the elderly
to the exhibitions.

To be eligible, home owners must be 62 years old and above, enjoyed
only one housing subsidy, and almost paid off their home loan.

The scheme is not open to those living in four-room or larger flats.
Mr Mah said this is because they have the option of downgrading to
unlock the value of their homes, and get cash. But he said HDB may
consider extending the scheme to them if there is sufficient demand.