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CNA
4 days ago
- Business
- CNA
Commentary: The tussle over retail rents in Singapore cannot go on like this
SINGAPORE: When small, often well-loved, businesses shut citing rising rental costs – as Flor Patisserie did when it announced its Siglap outlet was closing after a 57 per cent rent hike – online reactions of sadness and anger tend to follow. Then come comments that this is just how the free market works: Rents go up when demand is high, and those who can't pay must move on. And it is also the market that will punish landlords when no one else is prepared to fork out an unrealistic asking rent. But that is more myth than reality. Many landlords can afford to wait for higher-paying tenants, often large chains, and may even prefer prolonged vacancies over leasing to independent businesses at lower rates. Amid this age-old tussle, we need to ask: How big is the problem and what retail environment does this create? THE ECONOMICS BEHIND THE HIKE On the surface, the data suggests that retails rents have not seen a dramatic increase. Based on the Urban Redevelopment Authority (URA)'s Retail Rental Index, rent in the Central Region has remained relatively flat since 2020, even trending slightly downward from a recent peak of 101 points in the last quarter of 2019 to 78.7 points in the first quarter of 2025. But there are two limitations to the data: The Retail Rental Index only reflects executed leases, not asking rents. If landlords are holding out for higher-paying tenants and choosing to leave units vacant, these rates won't show up in the index. The index also only tracks retail space in the Central Region and may mask sharp changes elsewhere, particularly in suburban neighbourhoods undergoing gentrification. From a landlord's and an economic perspective, raising rent is rational. In Singapore, rental income isn't just about steady cash flow; it directly influences a property's capital value. Higher rents can unlock better financing terms and increase resale potential, especially in areas where commercial space is scarce. In neighbourhoods like Siglap, where demand stays strong and supply is limited, even small rent hikes can significantly boost valuation. For example, if a landlord increases monthly rent by a relatively modest 10 per cent from S$10,000 to S$11,000, the estimated property value could go from S$3 million to S$3.3 million. This offers a powerful incentive to increase rents especially in anticipation of refinancing or resale. But what's rational on a spreadsheet often feels very different on the street. What adds value to an asset may subtract vibrancy from a neighbourhood, which can counterproductively hurt the retail experience and footfall. WHAT WE LOSE WHEN SMALL BUSINESSES GO Big chains and franchises may bring consistency and scale, and that makes it harder to offer a distinctive experience. Small businesses cannot compete on price alone, so they must offer something money can't buy. They reflect the needs, quirks and rhythms of the communities they serve. When small shops are run by founders in person, they often offer the rootedness and warmth that make a place memorable – they may know our names and our usual orders. Besides displacing existing small businesses, aggressive rent strategies also raise the barrier to entry for aspiring entrepreneurs, especially those without deep capital reserves. For many local founders, whether just starting out or choosing to remain small by design, the ability to secure a foothold in a neighbourhood is essential. There is a risk of losing intangible pieces of neighbourhood culture or killing the entrepreneurial spirit of homegrown businesses in the long run – and of neighbourhood offerings that start to look similar, just as we sometimes bemoan the 'cookie-cutter' shopping malls. INTERVENTION IS POSSIBLE This is by no means a challenge faced only by Singapore. Some big cities have stepped in to protect small businesses from being pushed out of their districts. In New York City, the pending Small Business Jobs Survival Act aims to give commercial tenants more bargaining power in negotiations and the right to renew leases on fair terms. In Seoul, the government has taken a more area-based approach. Some areas have been declared officially Commercial Area Preservation Zones, where rents are controlled and financial incentives offered for landlords who retain traditional or small-scale tenants. While such policies do have their challenges, including potential trade-offs in market efficiency and difficulties in evaluating their impact within broader urban regeneration efforts, they demonstrate that intervention is possible. SHOULD THE GOVERNMENT INTERVENE? Singapore's stance on commercial rents has long been laissez-faire with an emphasis on free markets. But intervention does not have to mean drastically deviating from these principles, provided it is scoped, spatially precise and transparently implemented. In addition to zoning or conservation tools that Singapore already uses, rent control or lease protection can be confined to specific precincts, such as URA's Identity Nodes already recognised as distinctive neighbourhoods or for specific types of businesses. These could include subsidies, right-of-renewal clauses or escalation caps to prevent excessive volatility. Singapore Tenants United for Fairness (SGTUFF), a cooperative of business owners, has suggested linking rent increases to the Consumer Price Index (CPI). This approach is worth exploring, as an appropriate peg could stabilise lease renewals while still preserving landlords' real returns. The CPI is a reasonable and transparent benchmark, reflecting general inflationary trends and cost-of-living pressures. Whether it is the most suitable peg, however, depends on context. In some cases, CPI alone may not capture the dynamics of high-demand retail corridors; in others, it may offer a fairer basis for negotiation. The key lies in identifying the right variation, such as pegging rent to the CPI plus a modest premium, or tailoring adjustments based on location or tenancy profile. Such frameworks could introduce predictability and fairness, without unduly distorting market mechanisms. Sceptics may argue that rent control depresses investment or viability. But this isn't blanket rent control. Not every retail rent hike warrants intervention. It's about being deliberate about where and how to intervene: Done right, it is a retail conservation mechanism, not market distortion. Such measures could also give small shops support and the breathing room to adapt during periods of volatility or transition beyond lease renewals, such as neighbourhood redevelopment or broader economic stress. Another suggestion has been to penalise landlords who leave retail spaces vacant for too long. While the market already penalises vacancy through lost rental income, some landlords, especially institutional or well-capitalised ones, may still hold out for premium tenants or higher rents. A modest vacancy surcharge or a tiered property tax is also worth considering. This isn't about punishing legitimate vacancy but about discouraging prolonged withholding of space in areas where demand from smaller or independent businesses exists but is priced out. This has been trialled or is under consideration in some cities. In San Francisco, an annual Commercial Vacancy Tax applies to ground-floor retail units left vacant for more than 182 days a year, with rates escalating in subsequent years. Early reports point to modest reductions in vacancy rates, though enforcement challenges remain. URBAN DESIGN AND BETTER DATA None of these ideas seeks to override market forces, only to temper them with better foresight, equity and care. Urban design has a role to play too. More flexible zoning could allow for underused office space to be repurposed as retail or community space, expanding room for independent businesses. Monitoring rents more locally would allow earlier smarter interventions. While URA's REALIS platform provides useful aggregated insights, it does not consistently offer rental data at the street or unit level for commercial properties. As a result, hyper-local rent spikes often lead to displacement. More transparent, timely and granular monitoring would support more responsive planning and targeted action. NOT JUST WHAT THE MARKET CAN BEAR At the end of the day, the tussle over retail rental hikes is not just about economics. It's about the kind of city we want to live in. Planners, policymakers and landlords need to shape this answer. It doesn't require abandoning market logic, only applying it with more sensitivity and nuance. Sometimes that means intervention. Sometimes it means asking not just what the market can bear but what the community can.
Business Times
06-07-2025
- Business
- Business Times
Reit-owned malls more likely to forgo higher rents for right tenant mix
[SINGAPORE] For Singapore-listed real estate investment trusts (S-Reits), rent increases are tempered by longer lease terms, a need to curate tenant mixes to drive foot traffic, and a focus on keeping their tenants' businesses viable. These considerations set them apart from private commercial landlords, who may act more freely in setting rents, said analysts. Their comments come amid mounting concerns over surging retail rents. Headlines have spotlighted businesses facing steep rent hikes. Flor Patisserie, a local bakery, announced plans to shut its doors in April 2025, after its landlord raised the rent of its shophouse unit by nearly 60 per cent. The food and beverage (F&B) sector also saw a record number of closures last year, even as large China retailers expanded their footprint in malls. Analysts said such sharp increases in rent are more typical among private landlords or in prime locations within malls. They also noted that strata-titled properties and shophouses operate under different motivations from institutional landlords. According to real estate consultancy Cushman & Wakefield, prime retail rents in both the Orchard and suburban areas have slightly surpassed pre-pandemic levels. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The prime monthly rent for the Orchard area rose from S$35.77 per square foot per month in 2019, before the Covid-19 pandemic hit, to S$35.83 psf in 2024. In suburban areas, the prime monthly rent rose from S$31.76 psf in 2019 to S$32.90 psf in 2024. However, there is no publicly available breakdown of rent rates for commercial properties between malls managed by S-Reits and private landlords, such as shophouses and strata malls. Rents not 'main priority' for S-Reits Rents are 'not always the main priority' of S-Reits as they place greater importance on tenant curation, said Sulian Tan-Wijaya, the executive director of retail and lifestyle at real estate consultancy Savills Singapore. On the other hand, private landlords tend to vary rent depending on their own strategies and objectives, and are more flexible with concepts and operating hours, she added. The structural differences in lease tenure also play a role. Private landlords often offer short leases of up to two years, while malls under S-Reits tend to sign tenants on longer terms of at least three years, with renewal options. This locks in rent levels and contributes to rental stability at malls managed by S-Reits, said Carmen Lee, head of investment research at OCBC. Nevertheless, the changing habits of consumers, as well as the increasing cost of running a business, can contribute to the perception that rents are rising faster, said analysts. They pointed out that the cost of manpower and utilities have also increased alongside rent, even as Singaporean shoppers go overseas or online to stretch their dollar. 'When sales are down, every cost, including rent, would naturally be high by comparison,' said Tan-Wijaya. The chief executive officer of Lendlease Global Commercial Trust Management, Guy Cawthra, said all malls have a spread of rents across their property, depending on the unit size, location and amenity, such as F&B or healthcare. There will 'undoubtedly be competition for tenants for the best space' in the best malls, which 'naturally' drives up rents, he noted. The trust is the manager of Lendlease Global Commercial Reit, which counts 313@Somerset, Parkway Parade and Jem among its retail properties in Singapore. Managing considerations S-Reits agreed that it was in their favour to ensure that tenants remain supported with sustainable rents. A spokesperson from CapitaLand Integrated Commercial Trust (CICT) said that it aims to strike a balance between supporting its tenants' growth and keeping its malls relevant to the needs of shoppers, while delivering long-term sustainable returns to its unitholders. CICT's retail portfolio includes prime malls such as Ion and Raffles City Singapore, as well as suburban malls such as Tampines Mall and Bukit Panjang Plaza. CICT works with tenants on their leasing arrangements to support their business needs. This includes tracking tenants' occupancy cost, which is the total rent as a percentage of total tenant sales. Its occupancy cost has remained below 19 per cent over the past seven years, with tenant sales consistently outpacing rent increases. Similarly, Cawthra said that Lendlease is 'highly aligned' with its tenants. 'We want them to succeed, (and we want to) maintain high occupancy and continue to provide a vibrant retail offering for our shoppers.' To that end, Lendlease monitors its tenant sales performance and supports them when required, such as through marketing and promotions. A spokesperson for Frasers Centrepoint Trust (FCT), which manages 10 properties, mostly suburban malls, said that the trust 'constantly curates and refreshes (its) tenant mix' based on consumer trends, as well as concept relevance and long-term viability of the tenant's business. The manager of Suntec Reit has taken a similar approach, introducing youth and family-oriented concepts at Suntec City to transform the mall into an 'experience hub' rather than a 'shopping destination'.
Straits Times
05-07-2025
- Business
- Straits Times
Rising rents threaten the future of heritage restaurants
SINGAPORE – Chew Kee Eating House boasts a claim few restaurants can these days. It has sold the same dish at the same unit in Upper Cross Street for 76 years, passing from one generation to the next in an unbroken line of succession. The vagaries of modern business, however, mean that the future of the purported birthplace of soya sauce chicken in Singapore now hangs by a thread. Its lease expires later in 2025, and third-generation owner Thomas Ho is not ruling out the possibility of calling time on the family business. 'We're not sure about the future, we'll need to see what our landlord does. If rent increases and the cost of ingredients continues to go up, there's only so much we can increase the price of food to keep up,' says the 40-year-old, whose rent has gone up by 18 per cent in recent years. Heritage trades like his are on edge amid rising rentals, the more drastic of which have booted out businesses like Flor Patisserie in Siglap Drive, whose landlord wanted to raise rent by 57 per cent. Amid the maelstrom of uncertainty, The Straits Times speaks to four multi-generational restaurants to find out how they are coping, and what will be lost if they succumb. Traditional trades, modern problems Pricey ingredients and pricier rents weigh down most food and beverage businesses in Singapore. But keeping up with the pressures of the present is arguably more onerous for heritage restaurants, which are also obligated to keep one eye on the past. Mr Ho, for one, is held back by tradition when it comes to revising prices. A standard plate of Chew Kee chicken noodles used to cost $4.50 in the early 2000s; it is $6 today. 'Our regulars remember how much it used to cost and we don't want this food , which is supposed to be affordable, to become a burden to them,' he says, adding that he last raised prices by around 50 cents a serving four years ago. The ghost of times past similarly haunts Mr Iszahar Tambunan, the third-generation owner of nasi padang restaurant Sabar Menanti, which traces its roots to a pushcart along Kandahar Street in the 1920s. 'A lot of customers say they used to be able to get a plate of nasi padang for $6, but after I took charge, it started costing $10. But this place wasn't turning a profit when I took over,' says the 46-year-old former ship broker, who started helping out at the North Bridge Road restaurant in 2014. 'I told my mother we needed to change the perception of customers that nasi padang had to cost a certain price.' Chew Kee Eating House third-generation owner Thomas Ho and his mother Madam Yu Lye Kuan at their coffee shop in 8 Upper Cross Street. ST PHOTO: GAVIN FOO Through social media campaigns, restaurant merchandise and greater publicity – Sabar Menanti is one of several institutions featured in the National Heritage Board's Street Corner Heritage Galleries initiative, for instance – he has gradually expanded the restaurant's clientele. Office workers and families now dine alongside long-time regulars. Staying nimble has kept his family's business alive. Over the past century, it has inched its way through Kampong Gelam, moving first from Kandahar Street to 747 North Bridge Road in 1986. The next move came in 2020, when high rent forced it down the road to 737 North Bridge Road. It moved into its current unit – 719 North Bridge Road – in 2023, after the previous landlord sought more than double the original rent. The requested monthly total of over $15,000 nearly crippled the business for good. 'I told my mum it's not going to work any more. My plan was to shut it because she didn't want me to sell it off to somebody else,' recalls Mr Iszahar. Sabar Menanti owner Iszahar Tambunan (first from left) and his family have tried to modernise the business with merchandise referencing popular dishes. ST PHOTO: SHINTARO TAY In this case, he was eventually rescued by a more accommodating landlord. Still, he worries. 'I always have this fear about what will happen when my lease ends . I can only leave it to fate for now .' According to Mr Nicholas Mak, chief research officer at property search portal rents in districts like Chinatown and Kampong Gelam are especially volatile because of limited supply. Boundaries are fixed and shophouse units limited, so a buoyant market and high demand often skew the market in favour of landlords. Plus, with the additional buyer's stamp duty rates now fixed at 60 per cent for foreigners, some family offices are turning their attention to commercial properties instead. Mr Zaki Maarof, chairman of One Kampong Gelam, a community organisation that aims to enliven the district, estimates that 20 to 30 per cent of the conservation shophouses in the precinct are now owned by foreigners. 'They're entitled to buy whatever they want to, but it's a shame that many of them don't feel any affinity for the place and don't care about what happens to its heritage,' adds Mr Haffidz Abdul Hamid, 64, who manages Kampong Gelam-based travel agency Halijah Travel. Chinatown is not the vibrant sea teeming with local businesses that Mr Ho remembers from his childhood, either. Many home-grown outfits such as Lee Kui Teochew Restaurant and Onn Kee Hakka Yong Tau Foo have since called it quits, and a red wave has engulfed the district. Chew Kee now sits sandwiched between a Hong Kong rice noodle restaurant and North-eastern Chinese kitchen. Hard to move elsewhere So, why not just move? That is the common refrain these business owners hear when they voice their woes to friends and customers. It is not an entirely unfair question. As Mr Iszahar himself has discovered, more affordable pastures lie farther afield. In 2025, he opened Surya – a healthier, high-tech offshoot of Sabar Menanti named after his late sister – in a Henderson Road foodcourt. 'Surya is more sustainable right now because it's in an industrial area, so the rent is more reasonable,' he says. It does not help that footfall in Kampong Gelam has dropped, with many tourists passing through only briefly, opting to eat and sleep in Johor Bahru instead, he says. He has considered moving Sabar Menanti to a more cost-effective waterfront shophouse in Boat Quay, but ultimately decided that it would not feel right. 'Kampong Gelam is where we started. If I have to end it, I'll end it here.' Chew Kee, too, is inextricably intertwined with its neighbourhood. 'We're so entrenched in Chinatown. People know where to find us, they associate us with this area. I want customers to be able to sit here and get a sense of how it all started,' says Mr Ho. Not to mention the logistical hurdles. Mr Iszahar faces a mass exodus every time the restaurant packs up and moves. He quips: 'Staff don't want to be part of the moving crew. Moving a house is already crazy. Moving a shop is even worse.' Mr Cedric Tang, 40, managing director of 30-year-old zi char joint Ka-Soh, is also at a crossroads. At its peak, his family ran six Ka-Soh outlets, including the original, Swee Kee Eating House, in Amoy Street. But the 82-year-old fish soup store shuttered in 2021, and they are now down to their final unit , a restaurant in Greenwood Avenue. Mr Cedric Tang, third-generation owner of Ka-Soh restaurant, examining several heritage items, including the abacus his grandfather once used to tally bills. ST PHOTO: BRIAN TEO Even that, Mr Tang says, is on its last legs. He is drawing a reduced salary and describes current profits as 'borderline', just enough to break even – a far cry from the 30 to 40 per cent profits the company pulled in decades ago. Though he expects rent to rise again when his lease expires in the third quarter of 2025, moving may not necessarily solve his problem. For one thing, the cost of renovations could amount to $200,000, a tall order in this economy. 'When we move the restaurant, we need to move the equipment, and all our stoves are custom-made. They may not fit the new restaurant. The exhaust , for example, is another $20,000 to $30,000; you can't just take it and move,' he says. Just as painful would be losing the customers they spent the last five years cultivating. 'Quite a lot of our customers are regulars who live nearby and come here two to three times a week for comfort food . If we lose that segment, it'll be hard to sustain this business,' he adds. For Mr Park Tan, the 37-year-old chef-owner of Indonesian Restaurant Pagi Sore in Telok Ayer, the Covid-19 pandemic drained resources that might otherwise have enabled him to consider moving. Mr Park Tan now runs Pagi Sore, founded by his mother Liyana Kwan in 1989. ST PHOTO: LIM YAOHUI With so many memories threaded through the physical space of the restaurant, founded by his mother Liyana Kwan in 1989, the prospect of letting go feels like an amputation. At the moment, business is still sustainable, but he does not know when another wrench will be thrown into the works. 'If possible, I'd like to keep renewing the lease because this is a second home to me. I've been here longer than I've lived in my HDB flat. This is where I grew up, where I chopped my first fish, washed my first vegetables. It was even where I held my wedding dinner when I got married .' Why not innovate? Sentiment, for these restaurants, is a double-edged sword. Dr Kenneth Goh is associate professor of strategy and entrepreneurship and academic director of the Business Families Institute at SMU. He notes that these businesses often operate with legacy cost structures, operating models and business models that are deeply tied to a past era. 'That's part of their charm, but also a constraint. Unlike newer establishments, which can pivot more easily to adopt leaner models or reach different market segments, heritage restaurants are often stuck in time. 'Adapting means more than just tweaking a menu. It involves reimagining the entire dining experience – how food is prepared, presented and delivered, and by whom .' The fear of corroding his mother's legacy has held Mr Tan back from making too many changes to Pagi Sore's recipes. He staunchly sticks to cabe kering, her preferred type of chilli, even though they cost twice as much as alternatives. 'I'm okay giving up profitability to maintain things the way they are. What's at stake for us is different. Regulars remember how the food used to taste and they like it this way,' he says , adding that nothing brings him greater satisfaction than feedback that his cooking tastes just like his mother's . Mr Tang with Ka-Soh's signature dish, sliced fish soup with thick bee hoon, at its Greenwood Avenue outlet. ST PHOTO: BRIAN TEO Mr Tang and Mr Ho are also sceptical about incorporating too much technology into their work. Some of their dishes require skills honed through years of practice – skills that cannot simply be replicated by a robot. Mr Tang cites the example of Ka-Soh's Golden Dragon Chicken, a delicate and laborious dish that involves removing the skin from the chicken whole, dehydrating it, and then slathering it in prawn and sotong paste. In the words of Mr Ho, the tongue is the best tool. 'I used to work in the kitchen, so much of the tasting was done by me. It's a very instinctive process that I grew up learning.' It is this old-school, homespun quality that is the bedrock of Chew Kee's appeal. 'People want to see that display of craftsmanship, so we can't fully automate the noodle-making process. They need that assurance that they're getting a certain standard and quality.' But Dr Lye Kit Ying, a senior lecturer at the Singapore University of Social Sciences, whose research interests include cultural heritage, argues that evolution does not necessarily mean forsaking tradition. 'Evolution, to me, means to adapt and change in a way that allows the traditional knowledge of the dishes and the communities built along the way to make sense to the current generation. New traditions are made to complement existing traditions and values,' she says. And indeed, these restaurant owners have had to make concessions along the way to keep pace with a changing world. Mr Tan, for example, has swopped regular beef for Angus brisket to meet the rising expectations of diners in the centre of town, as well as scaled back on salt and monosodium glutamate . However, his rempah – that cornerstone of Indonesian cuisine – remains unchanged. On the manpower front, shift times are now shorter, taking into account the growing aversion to long working hours. Mondays at Pagi Sore have been halved, with the restaurant dropping the less profitable dinner service to let staff rest. 'I was different; I was raised for this. But you have to understand that this might not be everyone's passion,' he says. Pagi Sore's Mr Tan tries his best to retain the taste of his mother's cooking. ST PHOTO: LIM YAOHUI While the food served on site still cleaves to tradition, Mr Tang and Mr Ho have expanded their businesses by rolling out ready-to-eat versions of their signature dishes. Mr Ho even collaborated with Singapore Airlines to launch his chicken in the air. For Mr Iszahar, who was unwilling to sacrifice the charcoal depth of Sabar Menanti's rendang by giving up its six-hour slow-cooking process, the solution was to park his modified meals under a different brand altogether. Surya retains 80 per cent of the North Bridge Road menu, but prepares food with modern equipment to save time, and pairs it with healthier side dishes like stir-fried okra and egg bittergourd ($1.50 each). What Singapore stands to lose Some 3,047 F&B establishments were culled in the annus horribilis of 2024. Death, never one to discriminate, claimed old and new, relaxed and refined. Closures are a natural part of the industry's life cycle. But when establishments that have been an enduring part of the cultural landscape vanish, diners lose more than just a place to eat at. In SMU's Dr Goh's view, these restaurants 'remind us where we came from'. 'Heritage restaurants are living links to our history. These are places where stories are passed down through the dining experience, and where a sense of continuity with the past is preserved.' One Kampong Gelam chairman Mr Zaki remembers the days when the neighbourhood was crowded with songkok makers, basket weavers, kueh sellers and other handicrafts. That, he says, was when the spirit of Kampong Gelam could be felt most palpably. 'We need to bring back those heritage trades to add more colour and more vibrancy,' he adds, warning that the district, with its rows of hipster cafes and Arabian restaurants, is in danger of over-gentrification. For the heirs of these proud culinary institutions, closure packs a personal punch. In these cases, it is never as simple as cutting one's losses and starting afresh. 'It's quite sayang (wasted),' says Ka-Soh's Mr Tang. 'I've always felt like a brand, especially a heritage one, needs to outlive its owner. It's also about legacy planning – I feel the responsibility to hand it down to the next generation.' Besides, surviving two closures in the last five years, only to capitulate now, is too painful to contemplate. But his family will not be the only ones to rue the loss of the restaurant. Long-time customers like Mr Aaron Chan, 39, are also loath to bid farewell to an establishment that has become so entrenched in their weekly routines. 'Even now as an adult, I 've made it a point to drop by every now and then to rekindle my childhood memories dining at Ka-Soh,' says Mr Chan, a public servant , whose family patronised the Swee Kee branch in Amoy Street every other Saturday when he was growing up. Mr Ho singles out this 'ren qing wei' or human touch as the secret ingredient. 'These days, you have soya sauce chicken everywhere, but what makes us unique are the familiar faces. Some of them come in and don't even place an order. They just say, 'you know what I want.'' Therein lies the significance of these decades-old businesses, according to Dr Lye. 'The celebrations of milestones and life events at these family restaurants through the years offer us opportunities to see how private, familial narratives contribute to the larger Singapore story.' Moreover, she points out that their ties to suppliers and customers translate to an established community identity that some newer businesses simply do not have. At Chew Kee Eating House, few diners refer to a physical menu when placing their order. ST PHOTO: GAVIN FOO Still, restaurateurs like Mr Tang need to be practical. 'At the heart of it remains the question, can my family survive the losses? I can't sacrifice my family for the sake of its brand. I have to put the people first. ' Likewise, Mr Ho is not ruling out the 'inevitability' of selling to an investor. 'We need someone who has the supply chain connections to manage cost and streamline our business model. As small entrepreneurs, there is only so much we can do without compromising taste .' He is open to the idea of scaling the business, as long as the expansion plans do not dilute the quality of Chew Kee's signature chicken. Rectifying the rental problem Mr Chew is not the only one unwilling to let businesses like his go gentle into that good night. The Government has tried to square the circle in a variety of ways, most recently with the SG Heritage Business scheme, which doles out support in the form of increased visibility, marketing aid and help to tackle specific business needs and challenges. The scheme, which is being piloted in the central area, is open to businesses which have been continuously operational for at least 30 years and exhibit community and cultural significance. Mr Muhammad Hazmi Zin, 42, managing director of 71-year-old nasi padang chain Rumah Makan Minang, says any attempt to remedy the situation is appreciated. 'Hopefully, better marketing will help Gen Z and Gen Y to understand our food culture and increase revenue. A lot of children grow up eating fast food and don't know about our existence.' Mr Tang, on the other hand, hopes that the sphere of eligibility can be expanded, so businesses like his can benefit too. He also stresses that more concrete change is needed to tackle deep-rooted problems like financial non-viability. In response to a May 2024 Parliamentary question about how to preserve the cultural identity of places like Chinatown, Kampong Gelam and Little India, the Ministry of National Development (MND) said it was working with community partners to encourage landlords to support heritage trades. When all the stars align, such arrangements yield a win-win situation for both landlord and tenant. Take, for example, the case of Rumah Makan Minang, which rents its Kandahar Street unit at a price slightly below market rate from the Muslimin Trust Fund Association (MTFA). 'Our organisation is one of the oldest Malay Muslim organisations in Singapore – we turn 121 years old this year – so a respect for heritage is baked into our DNA,' says MTFA president Abdul Rahman Mohd Hanipah, 42. On his part, Mr Hazmi makes it a point to take good care of the property, handling internal maintenance or minor repairs himself. 'This gesture allows us the breathing space to sustain and grow the business. It's a relationship built on mutual respect and understanding, and I deeply appreciate that.' These arrangements, however, are few and far between. Though MND said in its reply that organisations like One Kampong Gelam and Kampong Gelam Alliance (KGA) have worked with community stakeholders and the Urban Redevelopment Authority to match businesses with landlords who are open to supporting traditional uses, a KGA spokesman told ST that based on ground engagement, such accord is rare. Even for those who currently have the good fortune of reasonable rent, the thought of returning to the negotiating table does not inspire much confidence. 'It's a situation that makes it very tiring to do business because you don't know how much room there will be to negotiate, and when the landlord will stop valuing us as a heritage brand,' says Pagi Sore's Mr Tan. Mr Tan hopes Pagi Sore Indonesian Restaurant can continue operating in Telok Ayer Street. ST PHOTO: LIM YAOHUI To effect lasting change, The Singapore Tenants United for Fairness, which represents more than 700 business owners, is advocating for a reform of the landlord-tenant dynamic. Among its proposals are a new rent structure that places more weight on rental that is a variable percentage of sales, rental renewal caps that factor in inflation, and measures to prevent landlords from leaving shop spaces vacant for more than three months. 'We urge the Government to work on both increasing the supply of good retail spaces in both government- and private-managed properties and also allocate more of such supply to social-oriented private entities like co-operatives,' adds a spokesman. Beyond subsidies or rent control, Dr Goh suggests that the Government could boost heritage trades by acting as a market facilitator. For instance, by catalysing coalitions of heritage businesses as part of curated heritage or tourism experiences. 'This would enable them to reach new customer segments willing to pay a premium for authenticity, effectively aligning their heritage value with areas where demand is strongest.' Who will take over next? But when business has always been a family affair, there is one more piece that needs to fit into the puzzle: the matter of who will take over next. Mr Iszahar's twin children are 13 years old and already displaying the shrewd business sense needed to thrive in this cut-throat industry. 'My daughter Isabella likes to be a boss, and my son Luca has more business acumen – you can see it in the way he negotiates with people . They'll be a good match if they ever want to run Sabar Menanti.' Sabar Menanti owner Iszahar Tambunan (centre), with his wife Lena Kamarudin (second from left) and their twins Luca (first from left) and Isabella Tambunan. He inherited the restaurant from his mother, Madam Maryulis Marlian (seated). ST PHOTO: SHINTARO TAY As for whether Mr Tan's five-year-old daughter will follow in his footsteps, he is not holding his breath. 'By the time she's ready to take over Pagi Sore, F&B might not be very sustainable,' he muses. 'But it would be nice to have a third generation. This business was started by a woman, and I'd love for it to come full circle, and for my daughter to inherit her grandmother's strength and grit.'
Vogue Singapore
03-07-2025
- Business
- Vogue Singapore
As Singapore's F&B businesses shutter, what is left in their wake?
Heidi Tan was 21 years old when she decided to open her own patisserie. 'When you start so young, you don't have as much fear because you haven't tasted failure yet,' the Le Cordon Bleu-trained chef says with a laugh. 'I would say that starting a business is fairly easy. But sustaining a business'—she pauses, her tone turning pensive—'that is the difficult part.' Tan opened Flor Patisserie's first outlet on Duxton Hill in 2010, before the area became a magnet for the hip restaurants that line its streets today. 'There was no other Japanese patisserie in Singapore back then,' she confirms. 'We were the leader in this category, which put us in a very good spot.' The patisserie quickly gained a dedicated fan following for its intricate Japanese-inspired French pastries and cakes, always made fresh and with the highest-quality ingredients available. With the help of a small but growing team, Tan expanded the business's footprint across Singapore, from kiosks in high-traffic malls like Ngee Ann City and Funan to a storefront on East Coast Road. Flor Patisserie's Duxton Hill outlet, which closed in 2024 after 14 years of operation. @flor_patisserie Today, the brand operates from a single outlet in a stretch of quaint shophouses on Siglap Drive, where it has been for 12 years. Located in a largely residential area with veterinary clinics and tuition centres as its neighbours, the cake shop has become a beloved community fixture which draws customers from all corners of the island—a winning example of Singapore's fervent food culture. That is, until July this year. Facing an unsustainable rent hike (a proposed increase in the monthly rent from $5,400 to $8,500, a 57 percent rise), Tan has made the difficult decision to close Flor Patisserie's final outlet. 'It was the pandemic that opened my eyes to how unsustainable running a brick-and-mortar business is in Singapore. Even big chains find it difficult to survive—so what more small, independent businesses, which don't have economies of scale to rely on?' Tan reflects, pointing to global chains like Hai Di Lao and Burger & Lobster, among others, which have shuttered in the past year. To survive the sluggish markets brought on by COVID-19, Tan had made the decision to close Flor Patisserie's higher-rent units in Duxton and East Coast, instead consolidating her resources into her Siglap Drive outlet. 'When we closed all the other shops at the height of the pandemic and retreated to this one, I did my calculations and told my team that the next two years were going to be hard. I wouldn't be able to give them their annual increment. But they understood completely,' Tan shares, her eyes welling up with tears. 'That's why I'm very sad to have to let them go now. Because they stood by me still.' Singapore's dining scene is headed in a troubling direction: flattened and faceless, rather than a true reflection of the country's character. For Tan's business to survive, a 57 percent hike in rent would require her to pass on a bulk of the cost to her customers—something she's reluctant to do. 'I will need to increase my prices at least by 30 percent,' she explains. 'This will completely alienate my patrons. 'We lost many customers when we closed our other outlets because it was a hassle to travel here. Our location is not the best as it has very little parking available and is 20 minutes from the nearest MRT station. We foresaw that drop in sales and planned for it—but now, with the rent increase, it just doesn't make sense.' The recent cascade of homegrown restaurants, bars and cafes shuttering across the island signals that Singapore's culinary landscape is headed in a troubling direction: flattened and faceless, rather than a true reflection of the country's character and the melange of identities that exist within it. This move towards becoming a hyper-globalised destination dominated by universal name-brands begs the question: what do we stand to lose when local businesses cannot survive? 'It is the small, independent business that adds vibrancy to the market,' Tan says. 'Local brands represent what the Singaporean identity truly is. As more big international businesses replace the small guys, the landscape will inevitably become sterile and cookie-cutter.' If this is Flor Patisserie's final chapter, what Tan finds the hardest to say goodbye to are the loyal patrons she has served time and time again, seeing them through numerous milestones. 'We have customers who started dating, then got married, then had children. And we've made the cakes for them to celebrate each occasion,' she says, emotion clouding her voice. 'That's what disappoints me the most about having to close—the community that has kept us going all these years and that we will no longer get to serve.' Hazel Long, Junior the Pocket Bar Hazel Long fell into bartending by accident. 'People don't believe me when I say this, but when I entered the industry, I didn't drink. I was looking to earn extra pocket money while in university and knew nothing about being a bartender,' she says. Today, the 30-year-old helms Junior the Pocket Bar, a speakeasy on Ann Siang Hill known for attracting a stylish, insider crowd. In Long's words, Junior became a cult favourite not because of size but soul. The bar rotates between a diverse Rolodex of concepts, from New Orleans jazz to Korea's Joseon dynasty, with a full remodel—from decor to cocktail list—accompanying each new theme, making the experience exceptionally immersive. Junior the Pocket Bar. Courtesy of Junior The Pocket Bar When Long announced Junior's seemingly abrupt closure earlier this year, messages of grief and support poured in from across the industry. 'If I could have kept us open, I would have,' she muses. 'The truth is that I had reached a point beyond burnout. With constant inflation, it became unsustainable to keep going.' Long had originally started running Junior with a partner, who left the business during COVID-19. 'The pandemic was challenging. Almost every day, we had to navigate new guidelines in order to stay open while keeping our patrons safe. But I took on ownership because I wanted to keep the spirit of Junior alive and also take care of my team.' It was ultimately the long-term effects of the pandemic, rather than its most immediate challenges, that took the largest toll on the business. 'Pandemic lockdowns fundamentally shifted Singapore's cocktail culture. As people got accustomed to staying home, the desire to spend nights out also seemed to dwindle,' Long reflects. 'Before COVID-19, it was normal for a pair of guests to have five drinks between them in two hours. These days, it's often just one each. That loss adds up, especially in a space where every seat is precious real estate.' Long points to this drop in spending, combined with inflationary pressures across the board, as the key reasons that running the business became unsustainable. 'When eggs cost more at FairPrice, it's the same for bars. We don't get a special wholesale deal,' she says. 'Everything goes up.' With the growing graveyard of independent businesses shuttering one after another, a culture of fear has begun to take hold of Singapore's F&B industry. Rising costs have led to a steady creep in cocktail prices not only at Junior, but the majority of bars across Singapore. While Long sympathises with customers balking at the nightlife experience increasingly becoming more expensive, she explains that what may look like inflated pricing is often the only way a business can survive. 'There is this conception that bars pour some liquid into a fancy glass and slap a price tag on it at random. Understandably, some patrons don't know what a $28 cocktail actually entails. They don't see the 48 hours of prep that goes behind an infusion or the technique involved in manipulating it until it turns into gold. At a place like Junior, you are also paying for the venue, lighting and trained staff, which all come together to create that curated experience,' Long says. Beyond the loss of a beloved presence in the cocktail community, Junior's closure is also symptomatic of a larger problem: the steady erosion of individuality in our nightlife scene. 'If this keeps going and more independent businesses close, Singapore risks losing its edge and falling off as a nightlife destination,' Long warns. 'We rely heavily on tourism and on places like ours, not just chains.' With the growing graveyard of independent businesses shuttering one after another, she agrees that a culture of fear has begun to take hold of Singapore's F&B industry. This could turn promising talent away from joining the field, worsening the problem further. 'Right now, I'm just trying to grieve properly,' Long says. 'It's easy to feel like you have to move on quickly or find the next thing. But I gave everything I had to Junior. I need time to reckon with that loss.' She's not sure what comes next, but she's not ruling out a return. 'I still love the bar world,' she says with a smile. 'I just need to miss it a little first.' Vogue Singapore's July/August 'Home' issue will be out on newsstands from 13 July and available to preorder online.
Time Out
23-06-2025
- Business
- Time Out
Burp Kitchen & Bar at Bishan Park to close in late July 2025 due to challenging F&B scene in Singapore
If you're a regular at Bishan Park, you should be familiar with Burp Kitchen & Bar – a glasshouse-style café serving hearty Western dishes and daily brunches. Unfortunately, those relaxed meals spent surrounded by nature in this homely space will soon come to an end, as it's soon to close for good in a month's time. In a lengthy six-slide Instagram post dated June 17, 2025, the café announces its impending July 27 closure, while taking the opportunity to thank both its new and loyal customers and reminisce on the fulfilling journey over the past decade. The post states, 'Despite our best efforts, blood, sweat and tears, the current F&B scene has proven too challenging for us to continue pushing on. As much as we love seeing you walk through our doors, this has been a bittersweet and tough decision and we're devastated to say goodbye.' In line with everything else that has been happening in Singapore's food industry, one can probably guess that high rental fees and an increase of general operating costs are the main reasons for Burp's departure. Other well-loved F&B establishments that have recently shuttered, or announced upcoming closures, include beloved pastry café Flor Patisserie; Maxi Coffee Bar at Ann Siang; Wala Wala at Holland Village; and private members' club 1880. Burp goes on to thank all its past and present staff for their hard work and dedication. 'Restaurant work isn't easy. It takes commitment, thick skin and [a] good sense of humour. Your efforts have never gone unnoticed, you've shown grace, warmth and dedication. There are no words that clearly express the love and gratitude we feel for our staff [who] worked hard to keep the vision alive'. It is not clear as to whether Burp Kitchen & Bar has any plans to relocate, or whether another eatery will be taking over the space. Once Burp leaves the premises after July 27, 2025, Bishan Park will be left with Grub Pasta Kitchen and McDonald's as its remaining F&B outlets. Pet-friendly dining venue Palm Garden, and Japanese restaurant ToriYard, have also since closed their outlets at Bishan Park.
