Food prices in Singapore have been going up rapidly as the cost of raw materials such as oil, electricity, rice, and wheat has gone up sharply because of the supply chain disruptions caused by the war between Russia and Ukraine and rising inflation.
And to add fuel to the fire, there were at least 3 HDB coffeeshops that transacted for 8-figure sums in the first half of 2022, including the coffeeshops located at 848 Yishun Street 81 and another at 201 Tampines Street 21 which transacted for $40 million and $41.68 million, respectively. This has translated into even higher food prices for the patrons as stall holders had to increase prices on their cooked dishes with the new rents almost doubling.
That leaves our hawker centres, which are also our social institutions, as one of the few places where people of a diverse socio-economic background can get a wide selection of affordable food options. While hawkers may not be able to control the cost of raw materials, their rentals at NEA-managed hawker centres are at least kept more affordable than private coffeeshops.
If you are looking to start your hawker stall business in 2022, here’s a quick guide on the market rental based on the winning bids for new stalls from January to May 2022.
Read Also: Guide To Start A Hawker Stall Business In Singapore
If you are ready to start your own hawker stall business, here are some of the conditions that you need to take note of.
First, if you have successfully tendered for your stall, you will be required to be present at the existing stall to personally conduct or superintend the business, as you will not be allowed to sublet or assign the stall to another person.
Second, when submitting your tender of the rental for a stall, you should not include the service and conservancy charges, refuse removal fee, licence fees, and Goods and Services Tax (GST). But these costs are payable after you have won the tender for the stall successfully.
Third, you would only be able to submit one bid per stall and can only rent up to two cooked food stalls in the hawker centres managed by NEA.
Fourth, your tender deposit, which is equivalent to one month’s tendered rent, would be forfeited if you withdraw your tender after the closing date but before the award of the tenancy.
Lastly, you should note that there is no certainty that NEA will pick the highest tender or any offer.
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The hawker stall tender is based on an open and transparent tender system. As such, there is no minimum rental set for a hawker stall. Bids could be as low as $1. Nevertheless, it goes without saying that the locations with higher footfalls would have high bids due to the high demand.
Once the tender is successful, the tenderer would have to sign an agreement for a period of 36 months and have 3 months from the commencement date of the tenancy agreement to commence the business at the stall.
During the three-year tenancy period, the rents are kept unchanged. Upon the end of the tenancy agreement, should the tenderer wish to continue with operating the stall, the occupied stall will not be put up for tender again as it would be disruptive for hawkers who have already built their business and customer base. Instead, rentals will be adjusted based on an independent professional valuation that considers factors such as the footfall of the centre, stall size, and prevailing market conditions to assess the market rental.
Read Also: Guide To Small Business Recovery Grant (SBRG) For SMEs In Singapore
The rental of hawker stalls falls under two categories: market stalls and cooked food stalls. Under the market stalls, you can choose from up to 15 different articles for sale depending on your trade. This includes vegetables, frozen goods, fresh seafood, beancakes & noodles, to name a few.
Under the cooked food stall category, you could choose from 5 different articles of sale, depending on your trade. This includes cooked food, cooked food (Halal), cooked food (Indian cuisine), drinks and cut fruits.
For the intent of our article, we will focus on the rental rates for the three types of cooked food.
First up, let’s look at the price trends of hawker stalls for the cooked food type of sales.
Cooked food generally refers to the sale of any type of cooked food, including hot and cold desserts.
We have taken reference from the winning bids selected by NEA for cooked food stalls from January 2022 to May 2022. You would find hawker centres that had only a single transaction without a high and low figure.
Average Rental
Central Region – $2,919
East Region – $5,668
North East Region – $3,380
West Region – $1,337
Based on the tendered rentals, the average rental of a cooked food stall in the Central region is $2,919, which may seem to be lower than the average rentals in the East Region and the North East regions. This could be partly due to a lack of sufficient transactions in the East and North East regions, making it seem that the rates are lower in the Central region. Similarly, the lack of transactions in the North region is why we have not featured it on our list.
Among the Central Region stalls, the highest bid of $6,022 was submitted for a stall in Maxwell Food Centre, and the lowest rental for a cooked food stall was $1,300 for a stall at 335 Smith Street.
Next, we shall look at the rental rates for halal-cooked food stalls.
Non-Muslims who wish to operate a halal-cooked food stall, must obtain a Halal certification from MUIS before they can start selling halal food.
Similarly, we have taken reference from the successfully tendered prices for halal-cooked food stalls from January 2022 to May 2022. You would find hawker centres that had only a single transaction without a high and low figure.
Average Rental
Central Region – $1,855
East Region – $2,853
West Region – $1,112
The average rental rates for halal-cooked food stalls in the different regions are much lower than for cooked food stalls based on the winning bids from January to May 2022. It is also interesting to note that a halal-cooked food stall at Dunman Food Centre and Block 163 Jalan Bukit Merah were won with a bid of just $22 and $28, respectively.
The highest rental of $4,599 for a halal cooked food stall was recorded for a stall at Newton Food Centre. Coincidentally, it also has the highest median rental ($3,994) compared to the rest of the other hawker centres. This is not surprising given that the Newton Food Centre is a popular tourist attraction for local hawkerfare.
Lastly, Indian cuisine is the third and final type of cooked food stall that you can operate. Examples of Indian cuisine include vadai, thosai, roti prata, and nasi briyani.
We have again taken reference from the successfully tendered prices from NEA for Indian Cuisine cooked food stalls from January 2022 to May 2022. You would find hawker centres that had only a single transaction without a high and low figure.
Average Rental
Central Region – $4,945
East Region – $3,149
North East Region – $1,380
Be prepared to pay a high rental rate, if you intend to select Indian cuisine as your cooked food stall. The average rental in the Central region is $4,945, which is considerably higher than the cooked food and halal-cooked food stalls in the Central region.
Despite the higher average rents, two stalls at block 85 Redhill Lane and Block 335 Simth Street were won for a bid of just $36 and $52, respectively.
Similarly, like the cooked food stalls, rent for Indian cuisine at the East Coast Lagoon Food Village also goes for around $5,000 per month. This makes it the priciest hawker centre to bid for Indian cuisine based on the first five months of transaction records.
When bidding for a hawker stall, you should take into consideration the popularity of the particular dish that you intend to serve based on the demographics that patronise the hawker centre. You should also consider your competition within the same hawker centre and the foot traffic to gauge your potential bid.
Lastly, you should also consider the average cost of rental for each cooked food type in the different regions to ensure you are able to remain profitable even if the rates were to rise beyond the 3-year agreement period.
SMEs can enjoy extra financing support of up to $1 million through the Temporary Bridging Loan Programme when you apply online with OCBC. Terms and conditions apply.
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