Concerns rise over record-breaking HDB coffee shop rents and impact on F&B operators
Coffee shop rents in Singapore have surged to record highs, sparking concerns over food affordability and the survival of small F&B operators. In his TikTok post, former F&B owner Khoo Keat Hwee warns that unsustainable rental norms, driven by large investors and REITs, risk displacing local businesses and raising everyday living costs for residents.
Published
on
3 September 2025
Coffee shop rents in Singapore have reached unprecedented levels, raising questions about affordability for residents and sustainability for food and beverage (F&B) operators.
Khoo Keat Hwee, 38, founder of Mentai-Ya Japanese Cuisine and an F&B consultant, highlighted the issue in a recent series of social media posts.
He pointed to record-breaking tenders in Housing and Development Board (HDB) estates, calling the trend “unsustainable”.
Record-breaking tenders for HDB coffee shop
In February 2024, Chang Cheng Mee Wah secured the tender for Block 633 Tampines North Drive 2 with a monthly rent of S$88,889.
A coffee shop at Block 431A Northshore Drive in Punggol was tendered in May 2024 for S$62,888 per month, while another outlet in Bidadari reached S$73,888 in March 2025.
Khoo questioned whether these figures could become “new rental norms”, pushing food prices even higher in estates such as Tampines North, Punggol, and Bidadari.
He contrasted the current landscape with less than a decade ago, when monthly coffee shop rents typically ranged between S$30,000 and S$40,000.
By his calculation, a S$80,000 rent could translate into S$8,000 per stall, or S$61 per square foot each month before goods and services tax.
An online listing in a F&B rental Facebook group in July advertised a stall takeover opportunity at Chang Cheng Mee Wah’s coffee shop at 633 Tampines North Drive 2.
The rental was S$6,000 per month for the first year and S$6,500 for the second and third years, excluding maintenance, POS, dish collection, and pest control fees.
“To survive, a stall needs daily sales of at least S$1,000, equivalent to selling 200 plates of S$5 chicken rice every day just to break even,” Khoo noted.
He cited the closure of OK Chicken Rice’s outlet at Block 660A Edgedale Plains in Punggol as an example, despite the stall generating about S$30,000 in monthly sales.
Khoo criticised larger companies for treating coffee shops as long-term investment assets, which he said encouraged higher bids and rapid stall turnover.
“Low footfall, high rents, tenants come, tenants go,” he remarked.
Investment-driven rental escalation and REITs’ role
His concerns extended beyond HDB coffee shops.
In a separate commentary on TikTok, Khoo pointed to shopping malls such as Paya Lebar Quarter (PLQ), where he observed frequent tenant changes, including multiple food stalls shutting down.
He argued that real estate investment trusts (REITs) were prioritising rental growth as their key performance indicator, raising doubts about the long-term sustainability of such practices.
The issue of rising rents has also surfaced in other community facilities.
In Tengah, Khoo noted tender prices of S$36,000 for a general practitioner (GP) clinic, S$122,000 for a food court, and S$249,344 for a supermarket.
A separate record-high bid of S$52,188 for a GP clinic in Tampines in June 2024 drew comment from Health Minister Ong Ye Kung, who described the figure as “dismaying” and potentially harmful to healthcare affordability.
In response, the Ministry of Health (MOH) and HDB launched a new tender framework in May 2025.
Under the revised Price-Quality Method (PQM), 70% of evaluation weight is placed on service quality, with rental offers accounting for the remaining 30%.
However, Khoo questioned whether the reforms would make a meaningful difference.
He cited a Tengah GP clinic rated poorly by residents, with reports of no doctors on-site and reliance on teleconsultations. “
If PQM does not enforce minimum quality standards, it is just rental games,” he argued.
Khoo further expressed concern that small, independent brands were being squeezed out by well-capitalised chains, including international entrants.
He warned that coffee shops in new estates were already selling for S$30 million to S$40 million, with stall rents exceeding S$10,000 to S$12,000 monthly.
“This is the new trend—heritage stores out, mega brands in,” he said, cautioning that local operators may increasingly vanish from the marketplace.
Public frustration over wider cost-of-living pressures
Public frustration has mounted over rising costs in Singapore, with online commentators criticising what they see as policy contradictions.
Some lamented that while graduates were encouraged to become hawkers or blue-collar workers, the government has allowed rents for hawker stalls, HDB units and condominiums to escalate, alongside soaring Certificate of Entitlement (COE) prices.
They also noted limited eligibility for Community Development Council (CDC) vouchers, low employment rates, and retirees unable to fully access their Central Provident Fund (CPF) savings.
Others blamed real estate investment trusts (REITs) for driving landlords to raise rents, arguing that such practices prioritise fund managers’ metrics over tenants’ survival.
Commenters pointed out that most F&B outlets in malls are subsidiaries of large corporations, leaving little space for small enterprises burdened by high rentals and rising costs of goods.
Several argued that monthly rents of S$8,000, excluding additional fees, require daily sales of at least S$1,500 to break even, making small operations unsustainable.
Some predicted that eating out could eventually decline as prices surpass consumer tolerance, forcing a shift towards home-prepared meals and reducing kopitiams to “stranded assets”.
Others countered that many local SMEs still succeed, stressing that business resilience often depends on innovation rather than external conditions.
Broader calls for rental reform
The discussion reflects a larger issue: SMEs, especially in F&B, face growing pressure from unsustainable rent hikes.
In May, a bakery near Sembawang Road saw a 15% increase in rent, while a cake shop in Siglap faced a jump from S$5,400 to S$8,500—an increase of 57%—which led its owner to shut down.
On 12 June, advocacy group Singapore Tenants United For Fairness (SGTUFF) called for urgent structural reforms to help SMEs stay afloat.
Their recommendations include short-term relief and long-term policy recalibration.
Among their proposals: rental caps tied to inflation and a national reassessment of urban planning and commercial land use priorities.
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