Rising rents put the squeeze on small businesses

The Star

26-05-2025

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, 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 would go up 15% from his current rental of S$5,000 if he chooses to renew it, which will make running the business unsustainable.
'Rent takes up at least 50% of my total operating expenses,' said Koh. 'Costs of ingredients and labour are also increasing.'
Koh, who was charged a monthly rental of S$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%, from S$5,400 to S$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.
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%.
Since she started the gym in 2018, her rent has gone up by about 57%, including through the Covid-19 pandemic. She pays more than S$20,000 monthly now.
'Rent makes up about 30% 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.
'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 Straits Times spoke to also painted a picture of a retail environment where landlords hold most of the cards.
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, 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.
Sulian Tan-Wijaya, executive director for retail and lifestyle at Savills Singapore, said many malls are owned by real estate investment trusts where there is little room to reduce rents or incentivise desirable brands with lower rents.
Prime city or suburban malls still enjoy high occupancies. — The Straits Times/ANN