PERCENTAGE RENTAL SYSTEM

Abstract

From upmarket Orchard Road to suburban Marine Parade, owners of both old and new shopping complexes have been confronted by their tenants with demands for rent reductions. They cite worsening business and high overheads aggravated by "exhorbitant" rents as their reasons. This emerging trend calls for a rental system which can adjust to the economic situation. Many property consultants have suggested the Percentage Rental System as such a flexible system. In fact, two developers have taken up this suggestion for the shopping space of their projects - the Marina Square and the Forum Galleria. It is claimed that the Percentage Rental System would help retailers ride out the current economic downturn and it can also be construed as a positive marketing tool for the owner. This study endeavours to investigate the validity of such claims. It is also a study on the Percentage Rental System as a better means to cope with econominc changes in comparison with the conventional method of fixing rents. Shops in Liang Court are used as the subject-matter for a comparative study.