POLICY ON RELATIONSHIP BETWEEN RENT AND COST OF S.I.T. SHOP PREMISES

Mr John Ede asked the Minister for Local Government, Lands and Housing whether he will state-

(i) what is the policy of Government as to the relationship between rents and value or cost of construction of S.I.T. shop premises;

(ii) the total rent being demanded from the 20 S.I.T. shop premises surrounding the Princess Margaret Market off Stratbmore Avenue with effect from 1st June, 1957; and

(iii) the total cost of construction of these shop premises excluding the market.

Inche Abdul Hamid: The matter of fixing rents for shop premises, Sir, is purely a matter for the Singapore Improvement Trust. I am informed by the Board, with regard to these questions, that-

(i) There is no direct relationship between the rents fixed for shop premises and their cost of construction and other overheads, though it is unlikely that such rents would give less than an economic return on costs. They are assessed on their value as business premises by the Board with the advice of the City Assessor, taking into account locality and other such relevant factors. In the past, except for rehousing cases, it is usual for these shops to be let by tender at not less than the rents assessed.

(ii) The total rent being demanded from the 20 S.I.T. shop premises surrounding the Princess Margaret Market off Strathmore Avenue, with effect from 1st June, was $4,335 per month. However, as the Board has agreed to defer reassessment of these rents until the businesses have been operating for three years, the total rent for the 20 houses will now be $3,830 per month.

(iii) The total cost of construction of these shop premises, excluding the market, was $90,000. This, however, excludes the cost of roads, drains, part of the cost of sewers and the cost of land, for which a sum of approximately $60,000 must be added.

Mr John Ede: Mr Speaker, is the Minister aware that the retail prices in the shops are higher than those in the city and that Queenstown residents are going to the city to get their domestic needs instead of buying at these shops? Is the Minister also not aware that this is due to the high rents which are paid, and will he not consider a further reduction in respect of shops other than the two already referred to?

Inche Abdul Hamid: I am not aware, Sir.