Update: Far East Organization responds: “Thanks for following up. We ask for your understanding that we will not be commenting further on this matter. Moving ahead, we will continue to engage with our tenants.”

Just a couple of days ago, Mothership.sg wrote the story of local fast-food joint EwF being told to GTFO of Orchard Central, a Far East Organization (FEO) mall.

On the same day, FEO replied with a statement and answered some of our queries.

To recap, we selected these two questions FEO tackled. You can read the rest here.

1. Is there an increase in rental?

FEO: There is no increase in rental.

2. Was EwF informed of the changes in June 2015? Which part of the mall did FEO offer EwF to relocate to? Did they accept or decline the offer?

Tenants have been informed about the enhancement plans back in June 2015. They were presented with alternative options to relocate within Orchard Central or any other Far East Organization malls.

And EwF struck back with an email sent to us today (Dec. 16).

Written by a person called swee, the joint sought to clarify some parts of FEO’s statement. We picked out the more important parts for you.

TL;DR: EwF answered the alternative spaces offered to them and the uphill battle they faced trying to run a business in Singapore.

But if you have some spare time and are twiddling your thumbs waiting for the Force to be awakened, here’s a good read.

They countered FEO’s answer to Question 1 and even answered Question 2 for them:

It is imperative that we compare apples for apples. So when FEO says that there is no increase in rental, the statement must be put in the context of what alternatives were offered with no rental increase. EWF currently occupies a ground floor space with good foot traffic (only recently with the opening of the walkway to somerset 313) and visible frontage. We were offered alternative spaces on the second and third floors (which answered Question 2). These are spaces with poor foot traffic and no real visibility (in one of the units offered, the previous tenant had already shut down). It is in the context of patently inferior alternative spaces being offered, that there was no rental increase from what we are currently paying. A more accurate comparison would be of spaces on the same level. In this regard, we did enquire about 2 spaces on level 1, albeit further from the main thoroughfare for foot traffic. In response, we were told that we would have to offer close to 100% increase from the current rental we are paying.

The burger joint also threw shade at FEO’s usage of the word “enhancement”.

It also seems that FEO takes the view from their statement that replacing home grown brands with fairly generic international ones is “enhancement”. But that is their prerogative.

And schooled us on the real meaning of LPPL.

The power of the landlord to do “enhancements or enhancement works” is contractually provided for in almost all lease agreements in Singapore. This is unfortunately an industry norm. It is non-negotiable. You take it or you leave it. This enables landlords to “evict” you during your tenure or lease term even if you are not in default. No compensation needs to be made by the landlord in spite of the fact that the tenant has invested in renovating and building up the premises. To aspiring retail entrepreneurs, this means you can spend huge amounts of money building up your first store and the landlord can ask you to relocate to some other part of the mall you never intended to be in and rebuild at any point in time during your lease. Whether you have the money to do so, is your problem.

Here’s the entire note:

We refer to the article posted on “Mothership.sg” on 14 December 2015 titled “Far East Organization sent us this statement after the whole EwF brouhaha”. To date we have chosen not to speak to any media because, in truth, the message we put up at our premises was intended for our customers. We put the message up because we want our customers to know we are leaving not because we want to. However, in view of the statements made by FEO in response to some of your questions, we feel it is important to clarify some points. It is imperative that we compare apples for apples. So when FEO says that there is no increase in rental, the statement must be put in the context of what alternatives were offered with no rental increase. EWF currently occupies a ground floor space with good foot traffic (only recently with the opening of the walkway to somerset 313) and visible frontage. We were offered alternative spaces on the second and third floors. These are spaces with poor foot traffic and no real visibility (in one of the units offered, the previous tenant had already shut down). It is in the context of patently inferior alternative spaces being offered, that there was no rental increase from what we are currently paying. A more accurate comparison would be of spaces on the same level. In this regard, we did enquire about 2 spaces on level 1, albeit further from the main thoroughfare for foot traffic. In response, we were told that we would have to offer close to 100% increase from the current rental we are paying. In any event, in the course of discussions, it was made plain to us that these ground floor spaces were reserved for FEO’s own retail/ F&B brands (yes FEO has its own stable of retail/ F&B brands). It also seems that FEO takes the view from their statement that replacing home grown brands with fairly generic international ones is “enhancement”. But that is their prerogative. The truth is, the current retail landscape is very much controlled by large landlords. The reality for retailers is that to be in this industry, the options are few and far between. The power of the landlord to do “enhancements or enhancement works” is contractually provided for in almost all lease agreements in Singapore. This is unfortunately an industry norm. It is non-negotiable. You take it or you leave it. This enables landlords to “evict” you during your tenure or lease term even if you are not in default. No compensation needs to be made by the landlord in spite of the fact that the tenant has invested in renovating and building up the premises. To aspiring retail entrepreneurs, this means you can spend huge amounts of money building up your first store and the landlord can ask you to relocate to some other part of the mall you never intended to be in and rebuild at any point in time during your lease. Whether you have the money to do so, is your problem. It is in this respect that we had lamented in our notice “(g)uess this is what SMEs suffer with their landlords all the time”. We are but lamenting the harsh imbalances that affect not just us but other SMEs as well. A good instance of such “lopsidedness” in our wacky world is that lease agreements (which are obviously extremely one-sided) are exclusively drafted by landlords’ lawyers but it is the tenants who are made to pay these lawyers’ fees. The landlords say it’s standard industry practice. Because they’ve been doing it from as far back as anyone can remember. These are the times that we live in. We thank you for taking the time to read this. Regards,

swee

Protip to both FEO and EwF: As writers taking up free space online and offering free content, we do not know much about retail space. But we know something about communications – this very public spat is hurting the reputation of both brands. Instead of speaking to each other via Mothership.sg, why don’t both of you try some face-to-face communications? Coffee (and fries) on us.

We have contacted Far East Organization for their comments and will update the story accordingly.

Top photo from EwF Facebook page.

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