Singapore

Kopitiam owners say rent hikes are unlikely

In these challenging times, neighbourhood koptiams and shops are finding ways to cope - keeping costs down, innovating or getting Government help.

Prices at your neighbourhood kopitiam should remain stable - for now.

Coffee shop owners told The New Paper that they have no plans to raise rents these two to three years.

Mr Hoon Thing Leong, 68, chairman of coffee shop chain operator Kim San Leng which operates about 30 coffee shops, said that rents for his coffee shops will stay stable for the next three years if the economic conditions remain the same.

"All businesses aren't doing well. We can't just raise the rents to earn more - our tenants and customers will suffer," he said.

"The economy is bad, people aren't earning as much, so they might not eat out as often. For the tenants, they're also facing increment in labour and ingredient costs."

Five other coffee shop owners TNP spoke to also said that stall rental prices at their coffee shops will stay stable for now.

Mr Hong Poh Hin, 69, who owns a coffee shop in Serangoon Avenue 4, also said rental prices will be stable for the next few years.

He is also vice-chairman of the Foochow Coffee Restaurant and Bar Merchants Association which has about 400 members.

He added that if other owners were to raise prices in the near future, it would be based on the tenancy agreement or if new developments like public transport nodes sprout up in the area.

Mr Hong said: "If we can afford not to raise rental prices, we won't. It won't help us if tenants leave or if stalls increase food prices and customers leave."

Mr Johnny Yeow, 52, who sublets a coffee shop in Ang Mo Kio Street 11, said that although his recent margins for earnings have been "razor thin" because of the tough economy, he does not intend to charge stall owners more.

He said: "The landlord has increased the rent by 30 per cent over the years, but I didn't increase the rent for my tenants as I didn't want to pass this increase to them."

He added that he has not increased rent prices at his coffee shop for the past six years.

Rather than raising rents, Mr Yeow is looking into helping tenants cut back on costs by implementing an electronic self-ordering and self-payment system.

Two weeks ago, he installed one such machine at the drink stall he runs.

He said: "Times are bad, but we can't just look at earning through raising costs. Instead, we should look at other avenues like helping tenants reduce manpower costs and time."

For the past seven years, noodle stall owner Huang Jin Lian, 54, has been paying a stable monthly rent of $2,000 for her stall at a Jurong West coffee shop.

She said:"I'm happy that the rent hasn't increased. I don't think that it will in the near future since we've been here for so many years and the boss knows that it's difficult for us to maintain the business."

Senior lecturer at Singapore Polytechnic's business school Sarah Lim said raising prices might force tenants to leave.

"And empty stalls, just like those in shopping centres, don't look good," she said.

DOMINO EFFECT

Ms Lim also said that increased rental costs could trickle down to consumers in the form of increased food prices.

"For consumers, an increment of as little as 10 cents could turn them away from a coffee shop," she said.

Mr Tay Liang Swee, owner of roasted meat shop Fatty Weng in Bukit Batok agreed.

He said: "If the rent increases again, I might just have to move out because I can't afford to raise the price of my food anymore."

Associate Professor Ang Swee Hoon from the Department of Marketing at the National University of Singapore Business School said that besides keeping rentals stable, more can be done to help tenants and patrons.

She said: "Coffee shop owners can get their stall holders to stay open for longer periods of time instead of the regular lunch and dinner hours.

"They can also be more stringent in picking tenants to ensure that the food mix they have in the coffee shop is attractive to people."

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