Two Nanyang Optical shops may take break as sales slide
Nanyang Optical may temporarily shut two stores – at Paragon and Ngee Ann City – after sales plunged more than 70 per cent on the weekend amid new coronavirus crowd control rules.
The landlord of its Ngee Ann City store is still reviewing whether to give any rent relief, said Mr Bernard Yang, managing director of the chain, which has been operating in Singapore since the 1960s.
This is despite the Government expanding earlier announced property tax rebates to allow certain commercial properties that qualified for Budget 2020’s rebates of 15 to 30 per cent to now pay zero property tax for this year.
Malls, attractions and other public venues have had to limit their capacity and disperse groups of more than 10, or face penalties if they are found to have been a place of virus transmission. Many buildings, including malls, have sealed off multiple entrances to limit traffic flow.
Some major landlords have said they intend to pass on the property tax rebates to tenants. SPH Reit, which owns Paragon, said last week it will fully pass on its rebate “in a targeted manner” to tenants adversely affected by the pandemic.
Mr Yang told The Straits Times yesterday that sales at the two Orchard Road shops have dropped to the low hundreds of dollars this past weekend.
“This is even worse than during Sars,” he said. “If sales continue to drop… for the next few days, we may close the two shops temporarily for a month or two until the crowd control advisory is lifted.”
The nine full-time workers there may be asked to take annual leave or be deployed to other stores. “We are trying to avoid laying off the workers as they have been with us for many years,” he added.
But Nanyang Optical has had some progress on rent relief with Mercatus, a real estate arm of NTUC Enterprise and the landlord of its Jurong Point store.
A dispute had arisen after Nanyang Optical defaulted on more than $32,000 in rent for February and March.
Nanyang Optical, which owns 10 stores, received a letter on March 20 from a lawyer representing Mercatus demanding the rent and payment of a legal bill of $139.10 for costs in pursuing the arrears.
TRYING TO AVOID LAYING OFF STAFF
If sales continue to drop… for the next few days, we may close the two shops temporarily for a month or two until the crowd control advisory is lifted… We are trying to avoid laying off the workers as they have been with us for many years.
MR BERNARD YANG, managing director of Nanyang Optical, on plunging sales at the Paragon and Ngee Ann City stores.
The March 20 letter, seen by The Straits Times, states that if the rent arrears plus late interest payments were not paid by 5pm on March 27, Mercatus would “proceed to exercise its right to forfeit the lease by re-entering the premises at any time after the deadline without any further notice” to Nanyang Optical.
“But (yesterday), Mercatus told us they are going to give us rental relief of 18 per cent of one month’s rent for April,” Mr Yang said.
“The 100 per cent property tax rebate works out to 1.2 months of rent relief. So the landlord still has to give us one month of free rent.
“Mercatus also told us they are waiving the legal bill of $139.10 once we pay February and March rents.”
There may be more to come as well. Another landlord, SMRT Alpha, which operates commercial spaces at Singapore Sports Hub, including the Kallang Wave mall, told Nanyang Optical in a Feb 13 e-mail seen by The Straits Times that its request for rent relief was being evaluated and will be subject to “management’s review and final approval”.
The optical chain had told SMRT Alpha, a joint venture between units of SMRT Corp and NTUC FairPrice, that “its (Kallang Wave) shop’s daily sales had dropped by 20 to 30 per cent since February with daily sales barely exceeding $1,000 for days”.
Mr Yang yesterday said SMRT Alpha told the chain’s finance manager it would let the Kallang Wave tenants know by the end of the week what rent relief they are getting.
Have a question on the coronavirus outbreak? E-mail us at [email protected]
To get alerts and updates, follow us on Telegram.
Source: Read Full Article