Sunday, February 22, 2009

Long-time Dempsey Village tenants move out

New landlord raises rent by 150%, driving out nearly a third of the antique and furniture businesses

They have been tenants for as long as 15 years, but they are shifting out of Dempsey Village.

The trigger point for about 10 companies which sell antiques, carpets, furniture and wine?

Higher rentals.
The businesses are housed in nine blocks in the sprawling, rustic area, once home to a British military base.

A tender for a master landlord for the nine blocks attracted 14 bids in a tender last year. The Singapore Land Authority awarded the tender to Country City Investment (CCI), which put in a bid of $378,300 a month.

The latter is already the master landlord of Dempsey Hill and Dempsey Hill Green in the area which has been turned into a hip food and beverage (F&B) hub since 2007.

The tenants whom The Sunday Times spoke to said rental has increased by as much as 150 per cent.

According to a pioneer tenant who wished to remain anonymous, rental charged by the former master landlord Tanglin Warehouse ranged from $2.50 to $3 per square foot (psf) in the past 12 years. It has now risen to $6.50 psf.

'The rental has gone beyond our commercial sustainability,' said Ms Darika Suter, owner of Eastern Discoveries Antiques. It is moving out after 15 years in Dempsey.

Ms Anita Sam, owner of furniture store Journey East, is also relocating after 15 years there.
'I would rather pass on the savings in not paying a high rental, to customers,' she added.

Another pioneer tenant, Mr Hadi Nishaburi, owner of Oriental carpets and rugs store Jehan Gallery, said: 'I don't want to increase prices or bring down the quality of our goods due to higher rental.'

He, together with Ms Sam, Ms Suter and Ms Winnie Chua of Red House Carved Furnitures Co, are shifting to the Tan Boon Liat Building in Outram Road at the end of this month.

At least five of the 27 tenants in the nine affected blocks are downsizing.

Lotto Carpets, for example, is moving to a unit in Block 26, which is half the size of its current 5,000 sq ft premises in Block 15.

The tenants who are staying put said they are positive about the business prospects in Dempsey.

'There's a spillover from the F&B crowd and our customers are familiar with our location,' said Mr Imran Abid Mir of Lotto.

Mr Nicholas Ng, general manager of CCI, said its rentals 'are still more attractive than those in other commercial districts such as nearby Holland Village'. He added: 'Existing tenants have also been given preferential rates as they have been there for many years.'

While rent is a big issue, some tenants who are leaving said the development of Dempsey into an F&B sanctuary was also not in their best interests.

'The new crowd has created traffic but they are not our type of customers who are serious art and furniture buyers,' said Mr Nishaburi of the folk in their mid-20s to 40s who patronise the pubs and restaurants.

'More than 40 per cent of our customers have been driven away,' he noted.

Said a CCI spokesman: 'If the wrong crowd is the reason, why did the pioneer tenants also bid in the tender?'

About 17 pioneer tenants - including some of those who are moving out - formed Dempsey
Properties and put in a bid for $213,000 a month.

Mr Bob Hoe, one of the founders of Dempsey Properties, said the tenants put in a bid because they wanted to ensure a 'sustainable rent for business and to keep the retail mix'.

He is also the owner of Pasardina Fine Living, one of the pioneer stores in Dempsey.

But he is not relocating despite having to pay more in monthly rent.

'The location is within the boundaries of the expatriate market and the F&B offerings also draw the
middle- and upper-class crowds. Hopefully, that will enhance and maintain our business,' he said.

Source: Straits Times , 22 Feb 2009

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