Question

Mr Kenneth Tiong Boon Kiat: To ask the Deputy Prime Minister and Minister for Trade and Industry (a) what is the Ministry's assessment of the effectiveness of the Fair Tenancy Code of Conduct in preventing exorbitant rental hikes for SMEs upon lease renewal; and (b) whether Government will legislate caps on renewal increases that are linked to the Consumer Price Index (CPI) in the absence of material alterations or capital improvements by the landlord.

Written Answer by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong

1. The Fair Tenancy Industry Committee (FTIC) issued the Code of Conduct for Leasing of Retail Premises in Singapore to facilitate the negotiation process between tenants and landlords in a fair and balanced way. The negotiated outcome remains a private agreement between the tenant and landlord that takes into account supply and demand. Based on data from the Department of Statistics, the number of retail and food & beverage establishments increased by around 19% between 2018 and 2023, which suggests increased demand for retail spaces in recent years. We have no plans to legislate rental caps which will distort the market and could lead to unintended outcomes such as a reduced supply of premises for rent.