SINGAPORE (April 6): Covid-19 has really upset the apple cart. With the circuit breaker underway, many retailers including fast fashion, beauty salons, nail bars and spas have to close. In the wake of this displacement, and the amount of economic activity coming to a standstill, the government has announced three budgets, the Unity Budget ($6 billion), the Resilience Budget ($48 billion) and the Solidarity Budget ($5.1 billion).

Along with the Resilience Budget and Solidarity Budget, the government passed a new bill to defer contractual obligations to allow retail tenants to defer rental payments for six months. The new bill also ensures that landlords pass on property tax rebates which is 100% for retail, to tenants. The Monetary Authority of Singapore announced various financing schemes that SMEs including retailers can tap on.

Although details on the new bill to defer contractual obligations are not available yet, this is likely to be the most anticipated development for retailers. “Though retailers have to eventually pay back deferred rents, this bill will give a lot of breathing space to retailers given that rents can make up around a third of business costs,” notes Wong Xian Yang, Associate Director, Research, Singapore and Southeast Asia, Cushman & Wakefield. “Although the qualifying criteria (if any) for tenants to apply for deferment is still unclear, many tenants are expected to utilize this bill,” he adds.

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