‘Don't know what to do': Johor Bahru's heritage businesses near RTS station grapple with rising rents, inflation

CNA

14-05-2025

The flipside of its success, however, is rising rentals that have forced some heritage businesses out in recent years as land costs surge near the central business district.
For instance, Salahuddin Bakery, an old-school Indian-Muslim confectionery that has operated for 86 years along Jalan Dhoby, was forced to relocate last October to the suburb of Bandar Baru Uda, about 20 minutes away by car.
The bakery is best-known for its curry puffs, samosas and rectangular bread loaves browned to perfection in a large wood-fire oven.
Its fourth-generation owner Rahim Khan told CNA that the primary reason for the move was because the shophouse at Jalan Dhoby was bought by an investor, and the new landlord doubled the asking rent from RM4,000 (US$945) to RM8,000 a month.
'The reason given by the new owner (of the shophouse) was that this was the current market price,' said Khan.
'I was stunned and did not know what to do,' said the 37-year-old, who took over the business after his father died in March 2023.
'I felt quite nostalgic and sad because I grew up there until I was 36 years old.'
Salahuddin had to give up its wood-fire oven at its new premises as installing one would infringe fire safety regulations.
It also lost some of its customer base, including Singaporean tourists, after the move.
'It's sayang (wasted) because this is my family's legacy that is approaching a century old,' said Khan.
Other old-timers in the area that have shut in the last couple of years include a wholesale shop along Jalan Tan Hiok Nee operated by the firm Dian Huat Trading, as well as a street barber at Jalan Wong Ah Fook who had operated there for 50 years, said Khan and other business owners.
The area has a history of over 130 years and served as a business centre and place for Chinese clans to conduct educational courses, states a poster describing the Johor heritage trail at the site.
It added that the area was recognised as a 'cultural street' from 2009 and has since hosted more than 400 'cultural activities'.
The area is roughly 335,000 square metres, the size of around 30 football fields.
According to Teh Kee Sin, advisor of the Small and Medium Enterprise (SME) Association of South Johor, most of the shops there are heritage businesses – family-owned establishments that lasted generations, offering traditional products and services.
DOUBLE WHAMMY OF HIGHER RENTS, INFLATION
Rents in the area, dubbed a heritage lane, have increased over the last year by 20 per cent to around 200 per cent, according to research by Johor-based Olive Tree Property Consultants.
The area is two kilometres from the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link station in Bukit Chagar and value of land in this zone has increased.
As more investors buy commercial and retail property, tenants are seeing rentals rise.
Samuel Tan, the chief executive of Olive Tree Property Consultants, said demand for retail space in southern Johor Bahru has outpaced supply due to the impending RTS Link as well as the Johor-Singapore Special Economic Zone.
The former will improve connectivity with Singapore while the latter is expected to grow Johor's economy.
'These game-changer projects further boost the area's commercial potential, prompting landlords to raise rents in anticipation of higher demand,' said Tan.
This is inevitable in a free economy, he added.
'For legacy tenants like Salahuddin Bakery who may have been on older leases or paying under-market rents, the rental increase could be even higher,' Tan added.
Checks of online property portals showed that rental for a 1,300 sq ft shophouse at the heritage lane is around RM8,000 to RM9,000 per month.
In contrast, similar-sized lots at other dense locations in Johor Bahru such as Taman Molek, Taman Mount Austin and Bukit Indah are priced between RM2,500 and RM4,500.
Legacy tenants who remain said they worry that rising rents, along with inflation, could put them out of business.
Hiap Joo, a bakery and biscuit factory whose banana cakes are a hit with Singaporean visitors, told CNA that rent for its shop lot on Jalan Tan Hiok Nee has increased by roughly 10 per cent every two years.
Many shop lots in the area have been purchased by property investment conglomerates and the rent hikes have been increasingly 'ruthless', said Hiap Joo's owner Lim Toh Shian.
'These are big investor groups, they have capital,' said Lim.
His hope is that 106-year-old Hiap Joo continues to stay viable.
"I hope the traditional businesses can continue for many generations. If they change, there's no longer any point in calling (it a) heritage (lane),' Lim said.
Street barber Velu Seranggoo, who single-handedly runs V Vinod Barber Shop, said the rent for his shop lot has spiked by 'around a third' this year.
The business, which offers fuss-free trims using old-school mechanical razors and scissors, was started by his father more than 50 years ago.
Rent was mostly steady from the 1980s to 2020, said Velu, 69. But there have been annual increases over the last five years.
Velu is able to afford the rent so far, but does not know what the future holds.
'I don't know if we will be here in five years. Perhaps move to a store near Skudai (a town on the outskirts of Johor Bahru) where I stay. Let's see,' he added.
Tailor Mary Lin, who uses a vintage sewing machine and owns a mom-and-pop store along Jalan Dhoby, has also seen her rent increase 'steadily' over the years, but declined to specify the amount.
Lin, who is in her 60s, took over the business from her father three decades ago. She said she may be forced to retire and live with her family, who are based in Singapore.
'If rent continues increasing … for sure heritage stores will go out of business. We cannot afford rent, we have to shut,' she added.
Businesses have also been hit by higher prices of raw materials due to global supply chain disruptions and uncertainties in the trade war between the United States and China.
Labour costs, as well as prices of oil and butter have increased by around 10 to 20 per cent post-COVID-19, said Lim of Hiap Joo.
As a result, he increased prices of the bakery's banana cakes and buns by RM1 each after Chinese New Year in February.
"This year, I think business has slowed down by about 30 per cent. I don't know why, maybe the market is slow and ingredient prices are going up,' said Lim.
Among all Malaysian states, inflation is highest in Johor, according to latest figures from the country's department of statistics.
In March 2025, consumer prices in Johor increased by 2.1 per cent year-on-year, higher than the national average of 1.4 per cent.
Teh of the SME Association of South Johor said this is likely due to Johor's proximity to Singapore and Singaporean shoppers' demand for goods across the Causeway.
The double whammy of inflation of raw materials and higher rents 'has affected the businesses such as small food and beverage outlets, retail as well as convenience stores like barber shops', he said.
'The outlook is very challenging for microbusinesses vulnerable to volatility.'
SHOULD AUTHORITIES INTERVENE TO SAVE HERITAGE SHOPS?
Competition from modern, bigger companies is another factor, said heritage businesses.
Salahuddin Bakery's former premises, for instance, has been taken over by Chinese-style bakery Bei's Pastry, whose signature items include a floss bun and snowy mochi.
Its prices range from around RM5 to RM9, whereas Salahuddin's puffs and bread were priced between RM2.50 and RM4.
Legacy family businesses are 'no match' for the likes of hipster cafes, bubble tea shops and modern barbershops, said barber Velu.
'I think it's impossible to compete with their resources. They have more capital, more workers, and are backed by corporations. (I am) a one-man show,' he said.
Teh said the Johor state government should intervene and support heritage businesses through rental subsidies or low interest loans, or risk having them vanish from the heritage lane.
'They need support because we have seen a structural shift (in operating costs), not a short-term fluctuation. Without support, these legacy businesses will be replaced by short-lived trend stores or franchises,' he said.
The loss of these businesses would erode the 'unique character, cultural value and nostalgia' of the city's urban core, said Olive Tree's Tan.
He said the state government and Johor Bahru municipal council could consider designating conservation zones or heritage precincts where traditional businesses are protected.
They could also collaborate with owners of the buildings where heritage shops operate and grant them special incentives and tax rebates, as well as promote these businesses through guided tours and food trails.
However, he warned that there was a limit to how much the authorities should intervene so as to not distort the market.
'The '(highest-return) and best use' of a place is very often dictated by the highest price ascribed to it,' Tan said.
CNA has asked the Johor Bahru municipal council whether it intends to extend support to legacy businesses at the heritage lane.
Salahuddin's Khan acknowledged that the government cannot extend 'VIP treatment' to businesses like his simply because they have existed for decades.
But some form of support is critical to preserve the heritage of downtown Johor Bahru, which gives it a unique identity and helps draw tourists, he said.