Market-rate rent for wakaf properties, like Kampong Gelam shophouses, help fund mosques & beneficiaries: MUIS

Charging market-rate rents for wakaf properties is necessary to ensure that these religious endowments are used to support mosques and other beneficiaries, said the Islamic Religious Council of Singapore (MUIS).

In a clarification issued on Feb. 11, MUIS said wakaf assets must be managed according to the intentions of the donor — in other words, to benefit the beneficiary.

But if rent were to be set below market rates, the manager of the property could be accused of "shortchanging the beneficiaries" of the charitable income intended for them, it said.

The statement comes amid public concern over rising rents in Kampong Gelam, where some heritage businesses have said they are being priced out of the historic precinct.

Wakaf property must support beneficiaries

A wakaf (or waqf) refers to an Islamic endowment made for religious or charitable purposes, such as supporting mosques, schools, or hospitals.

A defining feature of wakaf assets is that they are inalienable, which means that they cannot be sold, inherited, or transferred, and must remain dedicated to their original purpose.

The wakif, or donor, sets out the beneficiaries in the deed. These can include mosques, madrasahs, needy descendants and charitable organisations, all of whom have a right to the income generated from the endowment.

Following that, whoever manages a wakaf — either MUIS or a trustee — needs to ensure the property continues to benefit those it was meant to support.

Trustees have a duty to charge market rents

In Singapore, the management of wakaf properties is governed by the Administration of Muslim Law Act (AMLA), MUIS said.

Wakafs are managed either by appointed trustees known as "mutawallis", or by MUIS itself through its subsidiary Warees Investments.

Trustees are screened and approved by the MUIS Council, and must comply with strict requirements, including submitting audited financial statements.

By charging market-rate rents, MUIS said wakaf properties can continue generating sustainable income for mosques and other beneficiaries in the long term.

It argued that charging substantially below-market-rate rents could be seen as failing in the trustee’s fiduciary duty, as it would reduce the charitable income meant for beneficiaries.

MUIS says it engages tenants facing difficulties

MUIS acknowledged the challenges that businesses face today, including manpower shortages, rising costs, shifting consumer preferences, and intense competition.

When tenants have trouble meeting rent payments, MUIS said it engages them through Warees Investments to assess their situation and may consider repayment arrangements.

It added that lease terminations or legal action are pursued only as a last resort, in line with tenancy agreements.

MUIS described this approach as an attempt to balance its responsibility to beneficiaries with "compassionate tenant management".

Kampong Gelam rent concerns raised in Parliament

Rent concerns have drawn attention in Kampong Gelam, one of Singapore’s oldest conservation districts and a historic centre of the Malay-Muslim community.

There are 26 shophouses in the area situated on wakaf land, out of more than 600 shophouses in the precinct.

According to figures raised in Parliament, most leases saw moderate increases in median rents, about 2 per cent per year, comparable with other central retail areas.

However, a small proportion of tenants experienced rental hikes of 25 per cent or more, particularly in high-footfall streets such as Haji Lane and Bali Lane.

For wakaf properties located in heritage districts such as Kampong Gelam, MUIS said it works with relevant government agencies to maintain, restore, and revitalise buildings in a way that preserves the character of the area and sustains their heritage value.

It also noted that, where relevant, heritage businesses may benefit from support schemes offered by the National Heritage Board.

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