SINGAPORE - Managing editor Han Fook Kwang's commentary ("HDB coffee shops are not District 10 bungalows; last Sunday) highlights how rentals increase when properties change hands.
JTC Corporation used to run flatted factories to help small and medium- sized enterprises manage rental costs and to encourage entrepreneurship. It even offered rental discounts to help kick-start businesses.
A few years ago, JTC properties were divested to Mapletree Investments, which resulted in hefty rental increases. Other private industrial property owners and developers took the cue from Mapletree and raised their rentals as well.
Also, old buildings owned by the Government and statutory boards were rented out at market rates or higher. The rentals set the benchmark for private developers.
For example, when the Traffic Police headquarters moved from Maxwell Road to Ubi, the old building was rented out. The current rentals are on a par with those for prime office buildings nearby.
The HDB should impose a minimum occupation period for coffee shop owners. It should also introduce a capital gains tax pegged to a certain percentage of the selling price to discourage speculation.
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