Rising rents lead Siglap Drive shophouse businesses to close; bakery Flor Patisserie to shut by July

New Paper

22-05-2025

Rental hikes at a stretch of 16 shophouses in Siglap Drive have driven at least three tenants to close down there since 2024.
Another two businesses told The Straits Times they will follow suit before the end of the year.
One of the business owners, Ms Heidi Tan, said she did not expect the quiet enclave of private homes - which does not get high foot traffic and is a distance from the nearest MRT station - to attract such high rents.
Ms Tan, who has run cake shop Flor Patisserie there for 12 years, intends to move out by early July because her landlord intends to raise the monthly rent from $5,400 to $8,500, a 57 per cent increase.
"If I were to take on $8,500, my only choice is to increase our prices, and that will only alienate my customers more. It is a lose-lose situation where the only winner is perhaps the landlord," said Ms Tan, who took to social media in April to highlight what she called an "exorbitant" rent increase.
The post, which drew public attention and was picked up by various media outlets, highlights the situation as an example of how businesses in many areas were trying to cope with rising rents.
When ST visited the stretch of shophouses on May 16, it found six of the 16 units there vacant.
Checks with former tenants found that three of the units had closed over the past year after their rents were raised. In one particular case, a landlord had asked for rent to be doubled from $5,000 to $10,000.
The Urban Redevelopment Authority's (URA) Realis data shows that in 2024, the median rent in Siglap Drive was $7,350 a month, out of four rental contracts in the area. The maximum was $10,800 and the minimum $3,500.
The shops still in operation along the stretch include bakeries, pet-related businesses, enrichment centres for children and a suitcase repair shop.
One business that moved out of Siglap Drive in March, after four years there, was pet supplement manufacturer Sirius Pet Biologics.
Its landlord asked for a nearly 30 per cent increase in rent - from $5,800 a month to $7,500, said Mr Antony Leo, the managing director of the home-grown company.
Mr Leo said he was taken aback by the increase, adding that the company had been looking for bigger premises to move to, and the rental rise caused it to speed up its plans.
Checks with former tenants found that three of the units had closed over the past year after their rents were raised. ST PHOTO: BRIAN TEO
"I don't think the economy is doing that great to justify such a steep hike in rent, especially as it is not in a prime district," he said.
The company is now at an industrial unit in Tai Seng, where it pays around $5,000 a month in rent.
The Siglap unit is currently listed on real estate website CommercialGuru at $8,500 a month, touted as a "prime corner shophouse".
Another former tenant, who did not want to be identified, said his food and beverage company moved out in February 2024 after the landlord doubled the rent from $5,000 to $10,000. The unit has since been left vacant.
Pet food company Taki Pets, which has been at Siglap Drive since 2022, said it will relocate to another area "where the rental is more sustainable" later in 2025. Its landlord had raised the rent by 69.5 per cent when it renewed its lease in 2024.
A spokesman for the company said that despite this, it chose to renew its one-year lease as it had made substantial investments in renovating and upgrading the unit. He declined to reveal his monthly rental.
He added that the landlord cited rising mortgage costs driven by high interest rates and inflation as key factors behind the increased rent.
The upcoming closure of Flor Patisserie and Taki Pets would leave Siglap Drive with eight empty units, or half of the 16 shophouses there.
When contacted, Ms Tan's landlord declined to comment. Attempts to contact other landlords were unsuccessful.
In the case of Flor Patisserie, Ms Tan said her rent went up after the shophouse unit changed hands.
According to data from URA Realis, the current owner bought the 1,840 sq ft two-storey shophouse for $3.2 million in December 2021. Comparable units were transacted at $1.75 million less than a decade earlier.
Ms Linda Lim, a sales staff member at Flor Patisserie, serving a customer who identified herself only as Dionna, at the bakery's Siglap Drive outlet on May 16, 2025. ST PHOTO: BRIAN TEO
Ms Tan said the company paid $4,000 in rent in 2013, and this was increased once to $4,500 over their nine years under the previous landlord.
"In April 2022, our current landlord increased our rent by 20 per cent to $5,400," she said.
To justify the latest $8,500 rent, the landlord had also cited rising mortgage rates and said that the rental market had gone up significantly, Ms Tan noted.
Mr Nicholas Mak, chief research officer at property search portal Mogul.sg, said the rising rents in Siglap Drive could be attributed to investors buying the shophouses at high prices, and then raising rents so they can reap investment returns.
He said landlords tend to refer to benchmark transactions to derive their asking rent.
In addition, investors tend to favour shophouses as the stock of such properties is limited in Singapore, he added.
"As more corporations, deep-pocketed investors and family offices invest in commercial properties, the property rental market is no longer a level playing field. Small businesses will suffer," Mr Mak said.