Published July 10, 2007

Tenants unhappy at Alexandra Distripark

Mapletree orders them out by next January without any compensation


MAPLETREE Investments has served eviction notices on all tenants at its Alexandra Distripark (AD) complex of buildings, but the tenants - some of whom have been there for more than 20 years - are unhappy that they are being offered no compensation and a scant seven months to move out.

In response, Mapletree said the tenants were aware for some time of the transient nature of their tenancy, and were informed of the possibility of redevelopment for at least two years.

Mapletree, a subsidiary of Temasek Holdings, plans to develop AD - together with the nearby PSA Building and The Comtech - into a business hub.

The company has issued notices of eviction to all tenants, giving them until Jan 31 next year to move out. The complex will be redeveloped after that.

Tenants, however, are saying that Mapletree's sudden move has caused chaos as they now have to scramble to look for suitable alternative premises.

Some of them have leases that are not due to expire until end-2008, and other tenants have an option to renew their leases for another year.

'Mapletree is relying on 'small print' in the tenancy agreement that gives them the right to give six months' notice to tenants,' said Fong Hoe Fang, managing director of Pagesetters, which is located in AD.

'Tenants, however, do not have reciprocal rights. There is no mention of compensation or help, just a cold letter telling us to get out.

'This pursuit of their financial gain is at the expense of tenants,' he added.

Mr Fong said he represents about 200 tenants at AD. Among other things, the tenants are looking for compensation; for Mapletree to cover relocation costs; a tenancy extension for companies that are unable to move out in time; and for Mapletree to help companies find suitable alternative premises.

So far, Mapletree has helped some tenants find alternative space at its other properties, but more help with finding new locations is needed, they said.

When contacted, Mapletree pointed out that six months' notice is 'standard' and highlighted that it has tried to help clients find alternative locations.

'As a responsible landlord, Mapletree has given them more than six months - in fact, 7-7.5 months' notice,' said a spokesman.

The three blocks that make up AD are getting 'old and obsolete, are costly to maintain and not able to meet new business needs', the company said.

'This decision to decant and redevelop AD is not a new decision,' the spokesman added.

'Tenants have been informed about the possibility of the redevelopment for at least two years.'

Mapletree had also reduced the lease tenure from the usual three years to two years when signing or renewing leases and as of last year, most leases were renewed for just one year, it said.

For tenants who insisted on signing two-year leases, Mapletree's right to pre-terminate was highlighted to them, the company added.

In the light of this, no compensation will be paid out, the spokesman said.

Mr Fong agreed that Mapletree is not bound to pay compensation, but the tenants are hoping for goodwill payments from the landlord anyway.

The tenants' problems are made worse by the fact that they will face higher rentals elsewhere due to the hot property market.

In addition, companies that have moved into AD recently have spent hundreds of thousands of dollars on renovation, and will now be facing losses. - With additional reporting by Janice Heng