We refer to Mr Paul Chan Poh Hui ( 'Stop rent hikes from killing small firms' ST, 31 Mar) and Ms Andeline Wong (No room for negotiation - ST, 31 Mar) letters.
Industrial rentals started rising in the second half of 2009, from a low base, as our economy recovered from the financial crisis. Some SMEs faced higher increases than average as they operate in locations that have become more attractive. Rentals have since stabilised from last year. In general, rentals constitute between 3% and 7% of business costs for SMEs in the manufacturing sector, depending on industry.
The Government has introduced measures to help small and medium-sized enterprises (SMEs) cope with rental costs.
First, we have released more land through the Industrial Government Land Sales (IGLS) programme. To ensure more timely supply of industrial space, we have shortened the project completion period for IGLS sites from 8 years to 5 or 7 years. With these measures, an average of about 500,000sqm of multiple-user factory space is expected to be added over the next three years. This is almost double the average annual demand from 2011 to 2013, and could help ease rentals. In addition, shorter tenures and smaller sizes industrial sites have been released for SMEs that require customised land-based facilities at affordable prices.
Second, JTC is developing innovative projects with shared facilities for selected sectors, to help SMEs cut costs and raise productivity. These include JTC's new Surface Engineering Hub, which has a centralised wastewater treatment plant, and an upcoming Food Hub, which will include a shared cold room–warehouse facility.
To stay competitive, SMEs will need to boost their capabilities and transform their businesses. There are Government schemes to enhance productivity, spur innovation, facilitate business restructuring, expand overseas, and improve talent management. They can approach the SME Centres or visit https://www.enterprisesg.gov.sg to find out more.
Ms Kuek Chor Ling
Corporate Communications Division
Ministry of Trade and Industry