Small and medium-size enterprises (SMEs) are a significant part of Singapore's economy. They constitute 99 per cent of all enterprises and employ 65 per cent of all workers in Singapore. Critical for SMEs' survival are fair and affordable rental terms.
Typically, though, landlords have the upper hand in rental negotiations.
This is exacerbated by having REIT-landlords who impose steep rental increases to meet their investor demands. While the market can often be relied upon to set fair rentals, we have here a unique oligopolistic structure with major REIT-landlords that results in market distortion and inefficiency. Coupled with the high switching costs they have to bear, tenants have a poor bargaining position with landlords. To ensure adoption of the SBF's Fair Tenancy Framework that will level the playing field, legislation is certainly warranted. Enforcement, of course, should be done with a light touch - in Singapore style.