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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>March 7, 2009
RETAIL WOES AT FAR EAST PLAZA
</TR><!-- headline one : start --><TR>Rent arrears surge <!--10 min-->
</TR><!-- headline one : end --><TR>Rental default cases hit unprecedented level as recession takes its toll </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Joyce Teo, Property Correspondent
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At least five shops at Far East Plaza - out of about 600 - have been repossessed so far this year. The mainly small retailers and start-ups at the mall may be in a weaker financial position to ride out the crisis. -- ST PHOTO: LIM SIN THAI
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MANY small retailers face an unenviable cash crunch as the recession crimps sales - and this is fast taking a heavy toll.
At the prime mall Far East Plaza, rental default cases are already piling up.
Mr Charles Yue, a shop specialist who focuses on the Scotts Road mall, has already helped landlords repossess five shops since the start of the year, well up from 'one or two' for all of last year.
He is now handling an unprecedented number of cases of rental default at any one time - about 20.
This is where the tenant owes up to three months rent. The defaulting tenant must either pay up - or move out.
Far East Plaza is a strata-titled mall, which means it has multiple individual owners rather than one mall owner.
In regular economic times, about 50 cases of rental default crop up at the mall a year, as it attracts many first- timers trying their luck at opening a shop.
But Mr Yue, of Ginza Real Estate, said he has not seen rental default at the current levels.
'It has become more pronounced as the crisis deepened. After Chinese New Year, retailers experienced a drastic drop in sales,' he said. 'This round, more people have cash flow problems. Their sales have dropped and their income is less than their expenses.'
Strata-titled malls are likely to suffer more than single- owner malls because of a lack of a central lease management to handle vacancies as well as to promote the mall, said Knight Frank deputy managing director Danny Yeo. Read the full story in today's edition of The Straits Times.
RETAIL WOES AT FAR EAST PLAZA
</TR><!-- headline one : start --><TR>Rent arrears surge <!--10 min-->
</TR><!-- headline one : end --><TR>Rental default cases hit unprecedented level as recession takes its toll </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Joyce Teo, Property Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
At least five shops at Far East Plaza - out of about 600 - have been repossessed so far this year. The mainly small retailers and start-ups at the mall may be in a weaker financial position to ride out the crisis. -- ST PHOTO: LIM SIN THAI
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->
MANY small retailers face an unenviable cash crunch as the recession crimps sales - and this is fast taking a heavy toll.
At the prime mall Far East Plaza, rental default cases are already piling up.
Mr Charles Yue, a shop specialist who focuses on the Scotts Road mall, has already helped landlords repossess five shops since the start of the year, well up from 'one or two' for all of last year.
He is now handling an unprecedented number of cases of rental default at any one time - about 20.
This is where the tenant owes up to three months rent. The defaulting tenant must either pay up - or move out.
Far East Plaza is a strata-titled mall, which means it has multiple individual owners rather than one mall owner.
In regular economic times, about 50 cases of rental default crop up at the mall a year, as it attracts many first- timers trying their luck at opening a shop.
But Mr Yue, of Ginza Real Estate, said he has not seen rental default at the current levels.
'It has become more pronounced as the crisis deepened. After Chinese New Year, retailers experienced a drastic drop in sales,' he said. 'This round, more people have cash flow problems. Their sales have dropped and their income is less than their expenses.'
Strata-titled malls are likely to suffer more than single- owner malls because of a lack of a central lease management to handle vacancies as well as to promote the mall, said Knight Frank deputy managing director Danny Yeo. Read the full story in today's edition of The Straits Times.
