Dempsey sub-tenants facing uncertain future

April 6, 2007

Dempsey sub-tenants facing uncertain future

SLA terminates contract with main landlord due to rent arrears

By Arlina Arshad


TWENTY-SEVEN sub-tenants in Dempsey Road are uncertain about the future of their businesses after the Singapore Land Authority (SLA) terminated its tenancy contract with their master tenant due to rent arrears.

Last month, they were served with an SLA notice saying the authority's agreement with their master tenant, Tanglin Warehouse, has 'ceased to continue with immediate effect' and as sub-tenants, they were now trespassing on State land.

They will not be evicted though. The Straits Times understands that the sub-tenants have been invited to attend a meeting with the SLA next Friday.

Those interested in staying will get an extension until the end of March next year, or until a new master tenant is found.

'But if we don't turn up at the meeting, we will be considered not interested and must move out by April 23,' said one business owner, who declined to be named.

From this month, those who stay will pay rent directly to the SLA, instead of Tanglin Warehouse.

The affected sub-tenants operate businesses like wine bars, restaurants, antique furniture and carpets. Some 'pioneers' have been there for around 13 years.

Depending on their floor space, they pay rent of between a few thousand dollars and $20,000 to $30,000 a month. In the past three to four years, rent has increased by 5 to 10 per cent every year, said one sub-tenant.

The Straits Times understands that there is no formal lease agreement between them and Tanglin Warehouse.

The Dempsey Road area, on the site of the former Central Manpower Base, has been rapidly developed over the past couple of years and renamed Tanglin Village.

In November last year, SLA called for ideas to liven up the area, which has seen a number of upmarket restaurants and bars opening in recent months.

SLA said it terminated the tenancy with Tanglin Warehouse recently when 'the arrears situation grew increasingly worse and after all efforts to facilitate rental settlement failed'.

'As the proceedings are ongoing, it is not appropriate for us to go into details of our claim and arrears amount,' said an SLA spokesman, though she added that the authority is still prepared to resolve the situation with the company.

'In view of the years that the sub-tenants have been operating at Tanglin Village...SLA is facilitating their continued stay for up to one year, on terms and conditions to be agreed, after possession is recovered from Tanglin Warehouse,' she added.

SLA said it would help the sub-tenants and discuss tenancy agreements and rentals separately. A managing agent has also been appointed to assist them.

'SLA and its managing agent will keep communication lines open and liaise directly with the sub-tenants to address any issues and concerns, including meeting up in April,' it said.

A check with the Accounting and Corporate Regulatory Authority of Singapore found that Tanglin Warehouse was registered as a general warehousing company in April 1995.

When contacted, a Tanglin Warehouse staff member said: 'This matter is between us and SLA. We will not give any comment.'

Mr Thomas Teo, managing director of Wine Network, which opened along Dempsey Road about 41/2 years ago, said he is worried about how to continue his business.

He has suggested sub-tenants could form a consortium and tender for a block.

'I pay rent promptly so in this situation, I am not particularly comfortable. But I am confident SLA will be compassionate and find us a solution.'

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LOOKING TO SLA

'I pay rent promptly, so in this situation, I am not particularly comfortable. But I am confident SLA will be compassionate and find us a solution.'
MR THOMAS TEO, managing director of Wine Network.

ONE YEAR'S GRACE

'In view of the years that the sub-tenants have been operating at Tanglin Village...SLA is facilitating their continued stay for up to one year, on terms and conditions to be agreed, after possession is recovered from Tanglin Warehouse.'
SLA SPOKESMAN