Serious LimHngKhiang say Rent 'makes up small part of costs'

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An honorable member of the Coffee Shop Has Just Posted the Following:

http://www.straitstimes.com/business...-part-of-costs

High rents are a common complaint among Singapore companies, but Minister for Trade and Industry (Trade) Lim Hng Kiang sought to show in Parliament yesterday that rental costs here are not punitive.

Rent makes up a small share of total business costs for firms in the manufacturing and service sectors, while retail rentals have fallen over the years, he said.

The Government is keeping a close eye on business costs to ensure that they do not rise excessively, he added.

Mr Lim was responding to concerns raised by MPs on both sides of the House - including Mr Henry Kwek (Nee Soon GRC), Ms Cheng Li Hui (Tampines GRC), Mr Chen Show Mao (Aljunied GRC) and Non-Constituency MP Dennis Tan - about firms being squeezed by high rents even as they grapple with slowing economic growth.

Rents generally make up a small share of total business costs for small and medium-sized enterprises (SMEs) in the manufacturing sector, at between 0.7 per cent and 4.8 per cent in 2015, Mr Lim said.

They also constitute less than 5 per cent of business costs for most service sectors.

Rents for SMEs in retail, as a share of total business costs, have dropped from 32 per cent in 2011 to 30 per cent in 2015, on the back of the fall in retail rentals.

"We expect rental costs to moderate further with more space coming on-stream," Mr Lim added.

Industrial landlord JTC Corporation has also been developing industrial facilities with shared services, to help SMEs reduce capital expenditure and operating costs.

To provide space for start-ups, JTC set up LaunchPad@one-north in 2015 and plans to build a network of LaunchPads around Singapore, with the next one to be located in the Jurong Innovation District.

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