JTC AND HDB RENTALS (Rebates)

Mr Ang Mong Seng asked the Minister for Trade and Industry whether JTC and HDB will grant rebates on rentals to assist the small and medium industries and shop tenants during this period of economic slowdown.

The Minister for Trade and Industry (Mr Lee Yock Suan): Mr Speaker, Sir, in his Budget Speech, Minister for Finance announced that the Jurong Town Corporation (JTC) and the Housing and Development Board (HDB) would extend additional rental concessions to tenants and lessees as part of the Government's efforts to moderate cost pressures on businesses. Both JTC and HDB have frozen their posted rents of land leases until June next year. JTC has also frozen the posted rents of its factories during this period. In addition, JTC and HDB have moderated the annual rental adjustments of their industrial land and premises. About 70% of JTC lessees and 35% of HDB lessees who are paying at least 85% of market rent will not see any increase in their rents for the next 12 months. The remaining lessees who are paying rents that are well below market rates will have their rental adjustments capped at 4%. JTC's existing factory tenants will also be given a rebate of up to half of their contracted rent adjustment.

In October 1996 and December 1997, HDB implemented a package of rental concessions for its industrial and commercial tenants. This included moderating rental adjustments at third renewal of tenancies, granting up to 10% rental concession for those paying above market rent, and staggering increases in rent for subletting and assignment cases. About 10,000 commercial and industrial tenants (which are almost 50% of HDB's tenants) have benefited from the rental adjustment policy to-date. The total impact of HDB's measures was revenue forgone of $220 million. JTC and HDB will pass on to tenants the full 15% property tax rebate announced during this year's Budget Statement. They will also make upfront collections of rental payments monthly rather than quarterly.

The Government will continue to monitor economic conditions closely and take further measures, if necessary, to moderate cost pressure on businesses.