Furniture shopkeeper Chen Foon Kee is one of 7,100 HDB long-time shop tenants who will benefit from a longer grace period. - The Straits Times / Asia News Network
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 Housing and Development Board (HDB) banned new tenants from transferring such rental premises 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 began, average transfer fees have fallen 33% for HDB commercial property and 42% for industrial property, said National Development Minister Khaw Boon Wan.
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-time 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.
“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,” Khaw said. — The Straits Times / Asia News Network