With the Heightened Alert implemented from 16 May 2021 to 13 June 2021, indoor "mask-off" activities such as dine in F&B establishments will cease, forcing all F&B establishments to operate for takeaways services only during this period.

Some buildings that are mandated to close by government will by default offer rent free to the tenants inside. However, many of the tenants are still required by the shopping malls to resume operations regardless of the drastic drop in foot fall during this period. Some of the Landlords are giving 50% rental rebates as announced over the past few weeks.

However, is this 50% rental rebate enough? The answer is NO !! Especially for F&B establishments with large area of Dine In area. 

Since the F&B tenants are mandated to operate only takeaways services, the rental rates should be charged at the original rental rates as per their current tenancy agreements and multiply by the kitchen space of the premises. And then multiply by the Rental Rebate of 50% (based on the drop in foot fall during this period).

Eg. Kitchen Space 500 sqf x $10 sqf (including Base Rent, Svc Charge, A&P) = $5,000 per period of prohibited dine in period x 50% Rental Rebate (due to drop in foot fall ) = $2,500 per period.

Instead of Total Space = 3,000 sqf x $10 sqf (including Base Rent, Svc Charge, A&P) = $30,000 per period of prohibited dine in period x 50% Rental Rebate (due to drop in foot fall ) = $15,000 per period.

The reason is very simple. Why do these Tenants need to pay for the non-revenue generating floor space (dine in area). The sole revenue generating floor space is the kitchen space ONLY.

The Landlords should seriously consider the above proposal in order to be fair to the F&B tenants operating during this difficult period.

The Government should mandate the above as one of the key criteria under minLaw.

The Tenant should negotiate the above terms and conditions in their upcoming tenancy agreements.