Singapore: Restaurants ask malls for rent rebates to survive drop in business

The Restaurant Association of Singapore (RAS) has asked shopping mall landlords for a rental rebate to help the food and beverage industry survive the sharp drop in business since the coronavirus outbreak started late last month.

It also conveyed its gratitude to Jewel Changi Airport, which has offered its tenants a 50 per cent rental rebate for February and March.

At a press conference yesterday, RAS president Vincent Tan said the association sent out letters on Monday to 24 malls, which include those under CapitaLand, Frasers and Mapletree, to review rentals. It is looking at an initial cut of 50 per cent from February to April.

It had conducted a snap poll of its members and more than half the respondents indicated they expect a loss in revenue of more than 50 per cent over the next three months.

Close to 60 per cent said they were “not prepared or equipped” to deal with the unexpected situation.

The association has more than 450 members that operate close to 4,000 outlets.

It said some of the malls have responded to say they would increase marketing efforts such as free parking to drive customer traffic. They also said they were trying to understand the situation and would talk to tenants individually. But none has committed to a rental rebate.

Jewel Changi Airport had offered its rebate before the letter was sent out.

Mr Tan pointed out that rental and manpower comprise more than half the operation cost for most restaurants. Many have already cut part-time workers and the industry is trying to avoid retrenchments and closures.

RAS has also approached the Singapore Government for help. In a letter last Saturday addressed to Minister for Trade and Industry Chan Chun Sing, the association asked for a suspension of the foreign worker levy, wage support in the form of covering half the employers’ Central Provident Fund contribution, higher access to working capital loans and rental subsidies in government-owned properties such as of the Housing Board, JTC Corporation and the National Parks Board.

On efforts to offset the drop in dine-in customers, RAS said the increase in home delivery orders is too small and is restricted by the number of delivery staff. Restaurants also have to pay 30 per cent of the value of each order to the delivery companies.

And with few people going to the malls, any discounts or promotions offered by individual restaurants will just cannibalise business from the others.

Mr Andrew Tjioe, who is RAS’ president adviser, said: “We want to avoid sending our staff on unpaid leave as many of them live hand-to-mouth.

“Many of our members are small players and it will take them years to recover from this. That’s why closures are possible if we do not do anything.”