Straits Times: Wed, Dec 28
THE Turf City is likely to see a change of tenants when it reinvents itself as a lifestyle hub under a new master tenant in March.
Some current tenants say they are not renewing their leases with SH Cogent Logistics, citing rent which is several times higher than what they are paying now.
But a spokesman for SH Cogent said the new rates are no higher than the market rate, and it was the previous master tenant - Singapore Agro Agricultural (SAA) - that was charging far lower rents than it should have.
In October, the warehouse and storage facilities provider beat 11 other bidders to a 178,762 sq m plot of land at the former Turf Club in Bukit Timah with a tendered rent of $1.06 million a month. SAA, which has been managing the area since 2001, won the bid at $14.04 million but it was for a much larger plot of land.
The Turf City shopping mall and Turf Club Auto Emporium now have about 100 tenants, such as Giant Hypermarket and Ah Yat Seafood Restaurant.
Of a dozen retail tenants The Straits Times spoke to yesterday, half said they will not renew their leases.
SH Cogent had said earlier this month it is likely to charge monthly rent of between $4 and $9 per sq ft (psf), depending on the shop size and level.
But existing tenants, most with their leases due to expire in February, said this is several times higher than what they are paying SAA, which charges between $1 and $2 psf a month for its spaces.
Mr Rick Goh, owner of 72 Motoring, said the new rent would be 110 per cent more than what he is paying now for 12 lots of space for his used-car dealership. 'It's too much for me, so I've found a space in Short Street,' said Mr Goh.
Ms Jac Tan, who runs an interior decoration shop, said she was quoted six times the rent for the space she is leasing now. The shop will move out as well.
One of SAA's directors, Mr Roger Koh, said it offered such low rents as it wanted to attract more tenants. 'I can't comment on the new master tenant's business model, but we didn't want to charge our tenants so much that they can't survive.'
But SH Cogent's spokesman said the very low rates are skewing tenants' perception of what is acceptable rent. 'The rates are in line with market conditions.'
The firm is still in talks with tenants on renewing their leases and cannot reveal how many tenants will stay or leave.
Meanwhile, some tenants such as Ah Yat Seafood Restaurant said they intend to stay because of the customer base they have built up. Mr Dennis Ang, director of Sunflower Baby House childcare centre, said he is still negotiating the new rent, which he expects to be three times higher. 'Most of the childcare centres and children businesses here are doing well, so there's no reason to leave.'
Source: The Straits Times