Singapore's Commercial Rent Crisis: A Profit-Sharing Solution?

Singapore's Soaring Commercial Rents: A Crisis and Potential Solutions Singapore is facing a crisis in commercial rental costs. Some businesses are struggling to keep up with the rapid increase in rent. According to Terence Yow, Managing Director of Enviably Me Group of Companies, the rent-to-sales ratio, a key indicator of rental affordability, has skyrocketed to 50%. This is far above the healthy range of 15%. "Today we are seeing rent ratios from a healthier range of 20% to an unhealthy range of about 50% or more," Yow explains. This unsustainable situation threatens many businesses. The podcast explores a potential solution: profit-sharing rental models. This approach would see landlords and tenants sharing the risk and reward. In times of economic downturn, landlords would share the burden with tenants, ensuring business survival. This model promotes a more equitable partnership and ensures businesses can thrive even during challenging periods. Ethan Hsu, Head of Retail at Knight Frank Singapore, agrees that turnover rent is a viable solution. "It's a win-win kind of situation," Hsu states, emphasizing the benefits for both landlords and tenants.