MARKET rents for HDB's commercial and industrial tenants have fallen 5 per cent since January, Senior Minister of State for National Development Grace Fu said yesterday.
The drop is in line with market conditions and is part of HDB's regular review of market rents, she told Parliament.
Ms Fu highlighted the change to Madam Cynthia Phua (Aljunied GRC) who had asked if rental rates were being adjusted to market conditions.
Ms Fu also said that tenants, on renewing their leases, would have their rents adjusted to the market price, to make it fairer for all.
The HDB leases shops that are part of housing estates, along with office and factory space in industrial estates, as well as industrial land.
However, it will not freeze rents across the board because 'a freeze on rent increases is not equitable as it will result in different rental subsidies for different tenants', said Ms Fu.
'It is also not advisable for HDB rents to be disconnected from market realities. A better approach to help businesses during the economic downturn is to provide rental rebates.'
She gave this response to Ms Lee Bee Wah (Ang Mo Kio GRC) who had asked whether the HDB and industrial landlord JTC Corp would freeze all rents.
Ms Lee also asked if tenants whose rents were raised recently could have them lowered to the previous level.
Ms Fu reiterated that rents have to be pegged to market rates to 'ensure equity between two tenants'.
To help tenants, HDB and JTC are giving a 15 per cent rent rebate for commercial and industrial space for this year, as announced in the Budget, said Ms Fu.
For the small group of tenants who face substantial rent hikes despite these measures, HDB will stagger the increase over the tenancy term, she said.
Tenants can opt to renew their typical three-year leases for one or two years if they foresee rents falling.
Source: Straits Times, 14 April 2009