Rent is killing Singapore

[birdie69]

Rising rents put the squeeze on small businesses in Singapore: Should the Govt do more?​

Mr Melvin Koh (left), owner of Nicher, says his rent will go up 15 per cent, while Ms Grace Huang, co-founder of Neue Fit gym, says her rent has already gone up by 57 per cent.PHOTOS: WE.ARE.NICHER/INSTAGRAM, TARYN NG
Chin Soo Fang
May 26, 2025

SINGAPORE – The clock is ticking for Nicher, a bakery serving French pastries and coffee at The Brooks, a mixed-use development near Sembawang Road.

The bakery’s owner, Mr Melvin Koh, 39, has decided to sell the business when his lease expires at the end of June.

The former pastry chef with Marina Bay Sands says his lease will go up 15 per cent from his current rental of $5,000 if he chooses to renew it, which will make running the business unsustainable.

“Rent takes up at least 50 per cent of my total operating expenses,” said Mr Koh. “Costs of ingredients and labour are also rising.”

Mr Koh, who was charged a monthly rental of $4,500 when he started his business in 2022, is just one of a number of business owners across the island who are struggling with rising rents.

The rental squeeze has driven some businesses to write publicly about their woes on social media, drawing public attention to the issue.

One such business is Flor Patisserie, a cake shop in Siglap Drive. Chef-owner Heidi Tan said the landlord is raising the rent by 57 per cent, from $5,400 to $8,500, and that she intends to move out by early July.

In an Instagram post on May 7, she had said rent was “one thing that kills”, calling on the Government to do more to support small businesses.

On May 22, The Straits Times reported that at least five shophouse businesses in Siglap Drive have closed or are about to close because of rental hikes since 2024.

Ms Grace Huang, co-founder of Neue Fit gym at Kallang Wave Mall, took to Instagram on April 30 to share her struggles with rent hikes.

The 42-year-old said the lease for her 372 sq m unit will expire in December and she fears that the rental will go up. Other sports tenants around her have faced rental increases of about 20 per cent.

Since she started the gym in 2018, her rent has gone up by about 57 per cent, including through the Covid-19 pandemic. She pays more than $20,000 monthly now.

“Rent makes up about 30 per cent of our total monthly overheads, which is a huge burden for any small business,” she said. “It’s money we could be using to grow our programmes, support our team, or improve our members’ experience.”

She employs 10 full-timers, including national athletes who have themselves trained other current and past Team Singapore representatives.

Ms Grace Huang, co-founder of Neue Fit Gym, said rent has already gone up by about 57 per cent since she started the gym in 2018. ST PHOTO: TARYN NG
“We are a sports business in a sports mall, in what’s meant to be Singapore’s sporting district – and yet, we’re struggling to feel supported,” she said, calling it disheartening.

Business owners say rising rents are choking out small businesses here which often do not have pockets as deep as chain stores and global brands, and are less able to cope with sudden hikes.

Experts ST spoke to also painted a picture of a retail environment where landlords hold most of the cards.

Ms Huang said landlords should consider tenants’ business performance, or how they contribute to the space, when deciding on their leases, and not apply the same rental models across the board.

The Government could also consider targeted rental relief or grants for certain businesses, such as those in health, sports and wellness in the sports districts, she said.

When contacted, a Kallang Wave Mall spokesperson said the current lease with Neue Fit began in 2017 and was subsequently renewed in 2022 based on “negotiated and mutually agreed rental terms and tenure”.

“For a unit above 4,000 sq ft in size, the rental rate is well within market range,” the spokesperson said, adding that formal discussions regarding future rental rates for the current unit have not started yet.

Escalating rents​

Ms Sulian Tan-Wijaya, executive director for retail and lifestyle at Savills Singapore, said many malls are owned by real estate investment trusts (Reits) where there is little room to reduce rents or incentivise desirable brands with lower rents.

Prime city or suburban malls still enjoy high occupancies. For every space vacated by a weak operator, there will be more than one newcomer vying for that space, she said.

Shop units owned by private strata owners were probably acquired at high prices with mortgages to service. Owners facing higher interest rates will be less likely to lower their rents, she added.

She pointed out that one reason international brands can afford higher rents is that they benefit from strong supply chain networks, which bring down their costs.

According to Knight Frank Research, as at the first quarter of 2025, prime retail rents in a basket of malls within the prime central region have increased by 11.8 per cent in the post-pandemic period, while prime suburban retail rents rose by 5.8 per cent.

These gains follow a sharp drop in the pandemic years of 2020 and 2021, when prime retail rents fell by more than 20.2 per cent in the central region and by 8.7 per cent in the suburban region.

The retail sector is expected to remain challenging in 2025, with rents likely to ease and stabilise within a modest growth range of 1 per cent to 3 per cent over the course of the year, said Knight Frank head of retail Ethan Hsu.

While there have been calls for the Government to intervene to stabilise rents, Mr Hsu cautioned that intervening in market forces could lead to unintended consequences such as reduced investment in commercial property, or a decline in the quality of retail spaces due to decreased spending on maintenance.

At the moment, the Code of Conduct for Leasing of Retail Premises – which landlords must voluntarily adopt – sets out leasing principles when drawing up contracts and a framework for resolving lease disputes.

Space for government support?​

But Mr Hsu acknowledged that there could be scope for the Government to do more.

“For instance, the Government could consider managing the supply of F&B spaces within specific geographic areas to prevent market saturation and cannibalisation within a designated zone,” he said, adding that this will help food and beverage businesses survive better amid limited demand in the small local market.

Another measure that could be considered is a tax similar to the additional buyer’s stamp duty on chain F&B brands that expand too rapidly within a short period, he said. This could help moderate F&B growth to a more sustainable pace.

The Singapore Tenants United For Fairness (SGTUFF), a group of more than 600 front-line business owners across the food and beverage, retail and services sectors, said targeted regulatory mechanisms could protect the viability of small businesses while balancing the interests of investors.

Unregulated rent increases contribute to inflationary pressures, pushing up business costs and consumer prices, said SGTUFF in a social media post on May 2.

The group argued for some form of rental regulation, including a tiered rent cap system based on attributes such as property size and location, and incentives for landlords who offer long-term and stable leases.

Brand strategist Debbie Yong proposed piloting rent stabilisation in selected districts earmarked for cultural and entrepreneurial preservation.

Another way is to strengthen the Code of Conduct for Leasing of Retail Premises by turning it into enforceable legislation, she said, adding that it would be a practical first step towards rebalancing the power dynamics between landlords and tenants, without compromising long-term growth.

Ms Yong added that the rise in commercial rents is having a chilling effect on creativity and innovation in the F&B and retail sectors.

“As consumers, we ultimately suffer from lack of diversity and vibrancy in our dining and retail landscape,” she said.

“That, in turn, further dampens domestic demand, creating a downward spiral that undermines the very ecosystem we’re trying to grow.”

Who is the biggest landlord in Sindiapore? Who own the most lands? The greed has no boundary!

 

[VanDick]

This is now the problem of Chee Hong who is now the ministar of national development. But as a disgustingly overpaid jiak liao bee, expect him to sleep on the job.

 

[congo9]

High, inelastic demand.

Also, concerning the proliferation of tuition centres, it might be planned in collaboration with the MOE.

If that’s the case, MOE should not be in the business of approving tuition centre.
They should be focusing on bringing quality education to the cohort. By Brining in down the nos of people inside each class to around 25-20 people. More tuition classes does not speak well for the quality of education provided. Unless the kids here are really dumb

 

[batman1]

It's OK. 65% sinkees voted for it happily !!!

 

[True Believer]

Rental benefits some people in S'pore because we are not all created equal.

 

[searcher1]

Thanks to Pioneer Gen and Merdeka Gen ... buy $400K many donkey years ago, now change hands $40M

 

[True Believer]

Thanks to Pioneer Gen and Merdeka Gen ... buy $400K many donkey years ago, now change hands $40M

Freehold land is scarce in S'pore, so the govt's policy to attract ultra rich foreigners to set up family offices here and become citizens is sending the cost of buying properties and rents to shoot through the roof. Once these wealthy foreigners obtain their pink ICs, they will buy up our limited freehold land, and become landlords who charge an arm and a leg to tenants. The price of everything goes up as the businesses increase the prices on their goods and services to consumers. As for the Pioneer Generation like my parents who own 2 landed properties, do not blame them for possessing foresight back in the late 1960s.

 

[LITTLEREDDOT]

More S’pore businesses expect economy to worsen, cost pressures to rise: SBF survey​

Businesses here are also anticipating rising cost pressures over the next six months, the survey found.PHOTO: ST FILE
Therese Soh
May 28, 2025

SINGAPORE - The business outlook here has weakened considerably amid growing economic uncertainty, according to a Singapore Business Federation (SBF) survey released on May 28.

The percentage of businesses that see the economy worsening over the next 12 months nearly doubled on the quarter, from 22 per cent in the fourth quarter of 2024 to 40 per cent in the first quarter of 2025, the National Business Survey (NBS) 2025 found.

“This bearish sentiment is shared by both small and medium-sized enterprises, with the proportion expecting worsening conditions increasing from 23 per cent to 41 per cent, and large companies, where the figure rose from 18 per cent to 38 per cent over the same period,” the survey indicated. It collated responses from 526 businesses across major sectors.

Businesses in the hotels, restaurants and accommodations, health and social services as well as retail trade sectors showed high pessimism about economic prospects for the next 12 months, SBF said.

Notably, the hotels, restaurants and accommodation sector had the most cautious outlook.

It recorded the lowest score among all sectors for Business Sentiment Index (BSI) – a new indicator that consolidates key measures that capture business confidence.

The sector’s BSI of 52.2 was below the overall BSI of 56.5.

It also reported the lowest levels for revenue expectations, profitability expectations, positive business expansion outlook and level of planned capital investment, and had the least optimistic business growth confidence level.

Moreover, businesses are anticipating rising cost pressures over the next six months, NBS found.

The real estate and hotels, restaurants and accommodations sectors faced the highest cost expectations, with BSI scores at 78.4 and 71.9, respectively.

Some bright spots​

While overall sentiment is cautious, some sectors showed optimism.

The banking and insurance as well as education sectors were the most optimistic, with BSI scores of 61.2 and 60.5, respectively. These two sectors logged the highest revenue expectations.

Sectors with the highest profitability expectations included the education sector with a 60.8 score, the real estate sector with 60.4, and the banking and insurance sector with 59.1.

Business expansion outlook remained moderate at 61.6, indicating some optimism for growth – particularly for the sectors of education with a BSI of 66.6, and banking and insurance with a BSI of 65.6.

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Hiring outlook had a 57.7 score, suggesting that businesses intend to maintain their current workforce size.

The hotels, restaurants and accommodations, IT and related services and education sectors had the most optimistic hiring outlooks with BSI scores of 67.4, 61.8 and 60.1, respectively.

Businesses also identified the five most useful measures that emerged from Budget 2025.

These were the 50 per cent Corporate Income Tax Rebate; the enhancement of the Progressive Wage Credit Scheme; the Central Provident Fund transition offset; the extension of Senior Employment Credit; and the new SkillsFuture Workforce Development Grant.

Strong transformation momentum, liquidity concerns​

Transformation momentum remains strong as businesses are continuing to pursue long-term competitiveness through enterprise and workforce transformation, the survey found.

SBF chief executive Kok Ping Soon said: “It is important that businesses stay the course in enterprise and workforce transformation by leveraging on the slew of government support.”

Despite this, challenges of high costs of adopting new technologies and manpower crunches when staff attend training persist.

Internationalisation and artificial intelligence development schemes emerged as top priorities for enterprise transformation, NBS said.

The redesigned SkillsFuture Enterprise Credit and SkillsFuture Workforce Development Grant were the most preferred initiatives for workforce transformation.

Liquidity was a key concern for businesses as around a quarter face a moderate to severe credit crunch – with 35 per cent of these reporting insufficient cash to operate for three to six months, NBS found.

Businesses also wanted greater government support on financing related programmes, more flexible repayment terms and access to alternative financing solutions.

Noting that accessibility and cost of financing were areas of concern, Mr Kok said SBF hopes to work with the government and financial institutions to better support businesses.

This comes as some businesses may now require larger financing lines and longer financing terms amid the impact of US tariff measures, he added. THE BUSINESS TIMES

 

[searcher1]

Freehold land is scarce in S'pore, so the govt's policy to attract ultra rich foreigners to set up family offices here and become citizens is sending the cost of buying properties and rents to shoot through the roof. Once these wealthy foreigners obtain their pink ICs, they will buy up our limited freehold land, and become landlords who charge an arm and a leg to tenants. The price of everything goes up as the businesses increase the prices on their goods and services to consumers. As for the Pioneer Generation like my parents who own 2 landed properties, do not blame them for possessing foresight back in the late 1960s.

The commerical building & private landed is different scenario compare to HDB.
It's the HDB that is appreciating much more than the inflation & worker's salary combine
The resale market is also way crazy than it should be, next generation definitely suffer
HDB which is public housing, should not be treated as an asset for the Citizen

 

[True Believer]

The commerical building & private landed is different scenario compare to HDB. It's the HDB that is appreciating much more than the inflation & worker's salary combine The resale market is also way crazy than it should be, next generation definitely suffer HDB which is public housing, should not be treated as an asset for the Citizen

There have been periods where HDB resale prices have surged significantly, outpacing inflation and wage growth. During the past few years, HDB resale prices saw strong growth, with prices rising by 86% in 6 years between 2005 - 2011, while average nominal wages rose by 27% and CPI by 19% in the same period.

 

[k1976]

Singapore households’ debt up, but assets growth more than keeps pace​

Published Wed, May 28, 2025 · 04:16 PM

Singapore Economy

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• In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion. PHOTO: ST
• In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion. PHOTO: ST
• In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion. PHOTO: ST
• In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion. PHOTO: ST
• In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion. PHOTO: ST

[SINGAPORE] Households in Singapore have been racking up more debt since the fourth quarter of 2023.

Household balance sheet numbers from the Singapore Department of Statistics (SingStat) on Monday (May 26) showed that liabilities grew for the sixth straight quarter, rising 5.2 per cent in the first quarter of 2025 from the same period a year ago to S$384.1 billion.

Professor of finance and real estate Qian Wenlan from NUS Business School said the debt situation bears watching.

 

[k1976]

In the most recent quarter, household assets grew 7.8 per cent year on year to S$3.49 trillion.

Eugene Tan, associate economist at Moody’s Analytics, noted that the liabilities-to-assets ratio, which measures how much of a household’s assets are financed by debt, fell to 11 per cent in the first quarter, from 11.1 per cent in the previous quarter.

Tan said this ratio has been on a downtrend over the past decade.

 

[k1976]

A liabilities-to-assets ratio of 11 per cent means that 11 per cent of a household’s assets are financed by debt. If the ratio is falling, then increasingly fewer assets are being financed by debts.

Another item on the household balance sheet that the typical family owns – the amount of liquid assets, such as currency and deposits – remained well above total liabilities in the first quarter of 2025, said DBS Bank senior economist Chua Han Teng.

Liquid assets grew 7.5 per cent from a year ago to S$670.1 billion, outstripping the 5.2 per cent increase in total liabilities.

This means households have enough liquid assets in the form of currencies and deposits to meet all their payment obligations.

With household assets more than household liabilities, household net worth stayed positive, growing by 8.1 per cent in the first quarter from the same period a year ago to S$3.1 trillion.

That represents a moderation from the previous quarter’s 8.5 per cent growth.

There has not been a situation in the last 20 years where a typical family has more debts than assets, which is when household net worth turns negative.

Instead, net worth has been growing quarter after quarter. The only exception was from the fourth quarter of 2008 to the second quarter of 2009, when average net worth stayed positive but fell for three straight quarters.

Personal disposable income, an indicator of personal financial well-being, was up 5.2 per cent in the first quarter of 2025 from a year ago to S$93.3 billion, according to a separate SingStat statement on May 26.

 

[k1976]

I wonder how many of these families live in Hardland pigeon holes?

Is the data skewed by private property household?

 

[WangChuk]

So Amy Cork got go slap NEA silver serpents for their money face causing all these sufferings of the islanders? Or continue give them good ranking for higher salary raise and PB?