Singapore restaurateurs flee rising costs for cheaper lifeline in Johor Bahru

Yahoo

6 days ago

SINGAPORE, July 30 — Struggling with high rents and labour shortages, Singaporean restaurateurs are turning to Johor Bahru for relief, drawn by lower costs and the hope of reviving their businesses.
Hyderabadi chef Govinda Rajan, who opened his first Malaysian branch of Mr Biryani just three months ago, is already eyeing expansion, calling it a much-needed lifeline as his Singapore outlets battle to survive, the South China Morning Post reported.
Across the city state, food and beverage (F&B) businesses are closing at the fastest rate in nearly 20 years, with 3,047 establishments shutting down in 2024 alone.
This year has already seen 1,404 closures in the first half, including long-time favourites like Crystal Jade's Holland Village branch and Michelin-starred Poise.
Govinda and others say while ingredients in Malaysia may be pricier, the overall costs — from rent to wages — are far more manageable, helping restore profitability.
Singapore's tight foreign worker policies and locals' aversion to service jobs have further strained the sector, leaving many businesses short-staffed and financially squeezed.
Temasek Polytechnic's Geoffrey Tai said more operators are expanding regionally to escape Singapore's high overheads and tap into growing middle-class markets like Malaysia.
Lower operating costs have helped restaurateurs like Keith Koh, who opened a Muslim-friendly outlet of Lad & Dad in Kuala Lumpur in May, rediscover their passion and reduce burnout.
Still, Singapore saw 3,790 new F&B openings last year and nearly 2,000 more in the first half of 2025, though industry insiders warn many are underestimating the risks.
Chef-owner Bjorn Shen, who has expanded to Penang and Bali, said profits of 20–30 per cent are achievable abroad, compared to 5–7 per cent at best in Singapore, where most new restaurants fail within two years.