Deep Dive Podcast: Have rising commercial rents reached a tipping point?

CNA

29-05-2025

Amid rising rents and growing competition, some Singapore businesses are closing down or relocating to cheaper premises. A local bakery in Siglap recently announced on social media it was moving out after its rent was increased by 57 per cent. Are commercial rent hikes spiralling out of control, or is this simply market forces at work?
Steven Chia and Otelli Edwards speak to Ethan Hsu, head of retail at Knight Frank Singapore, and Terence Yow, managing director of Enviably Me Group of Companies and chairperson of the SG Tenants United for Fairness.
Here is an excerpt of the conversation:
Steven Chia, host:
Is there such a thing as a fair price?
Terence Yow, chairperson of Singapore Tenants United for Fairness (SGTUFF):
For those of us who have been in this business for 15 to 20 years, the benchmark for the rent occupancy to price ratio is about 15 per cent. That means if your shop (makes) $10,000 a month, a good healthy rent would be 15 per cent of that, which is $1,500.
Today, we are seeing rent ratios (ranging) from a healthy range of 20 per cent to an unhealthy range of about 50 per cent or more. Based on our observations, particularly among fellow small business owners, the occupancy cost has dramatically increased.
Steven:
Is there a list that tells us who's paying what and how much they're paying?
Terence:
No. There isn't data on this.
Otelli Edwards, host:
Do you think that the data should be transparent?
Terence:
That is something I've been advocating for a while. Again, I refer back to what we have done for residential units. Today, there is full data transparency (for residential units). You can almost identify which floor of which condo was the last transacted price.
And I would argue that such transparency measures have helped the market. It has helped both developers and buyers. I would strongly advocate for something similar in our sector of the market, although there are quite a few technical difficulties, since these are rentals, not purchases.
Ethan Hsu, head of retail at Knight Frank Singapore:
(But) these are leases and not sales. If it's a sale, then you can caveat because you have an interest in the property that you have purchased.
But once it's a lease, especially if it's a private lease held by a private landlord, it can be (considered) a trade secret. That's because that's how (landlords) price their shops in order to be competitive with the other units.