Thursday, April 1, 2010

Sheng Siong won’t scrap rental hike

AN APPEAL to supermarket chain Sheng Siong to reconsider raising rent from today has been rejected.

In response to a letter from stallholders from the Serangoon Avenue 3 wet market last week, Sheng Siong’s management said the rental hike was ‘a decision made by our board of directors, after considering all factors, such as long-term and short-term costs and sustainability of the business model’.

It added that the outcome is inevitable and sought the understanding of stallholders.

The 30 per cent rental hike comes after the chain’s controversial purchase of the wet market and four others – in Bukit Batok West Avenue 8, Fajar Road in Bukit Panjang, and two in Choa Chu Kang – from private company Heeton Holdings in December last year.

Previously, the supermarket chain’s managing director Lim Hock Chee said the chain had no choice but to increase rentals because it had to pay bank interest fees, tax and maintenance fees after buying the five wet markets for about $25 million.

Stallholders from the Serangoon market had met Marine Parade GRC MP Seah Kian Peng last week to discuss the issue. The MP, who oversees the Serangoon area, wrote a letter to Sheng Siong on their behalf, asking it to reconsider the rent increase and the duration of the contracts, which were cut from two years to one year.

Butcher Richard Goh, 50, who was one of the stallholders who approached Mr Seah for help, said he has given up fighting the decision.

‘We tried our best and there is nothing left to say. Now we just have to try to survive,’ said Mr Goh, who has been running his stall at the market for 15 years and currently pays $2,200 in monthly rent. He will now have to fork out $2,860 in rent.

Another stallholder, who did not want to be named, returned one of his units and laid off two of his workers yesterday.

When contacted by The Straits Times, Mr Seah said he expects stallholders to approach him again for assistance.

On Sheng Siong’s decision, he said it explained the reason for the rental hike but not the shortened contracts.

‘From a business point of view, you want a lease of a reasonable tenure, and a one-year lease is rather short,’ he said.

Source: Straits Times, 1 Apr 2010

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