How High Are Hawker Rental Prices in Singapore Anyway?

This was a quick 1-2 hour research triggered by the poor state of research done by in the article, “Commentary: Singaporeans’ reluctance to pay more for hawker food is endangering the trade“, which we understand was probably based off of this NEA snippet “Written Reply to Parliamentary Question on rental rates for non-subsidised hawkers“.

In that article, it is stated that “…contrary to popular assertions of high hawker rents, data from the National Environment Agency (NEA) indicates that the median assessed market rent for non-subsidised market and cooked food stalls has remained at approximately S$320 and S$1,200 per month respectively since 2019…”

We think this gives people the wrong impression that rentals are a non-issue, and we sought to do some quick research to account for this.

You can make data say whatever the heck you want nowadays. For example,

If we wanted to make the rents look cheaper we could:

• Exclude table cleaning charges.
• Group Indian/Halal cooked food stores into a single category despite their market economics being different, dragging down the overall trends.
• Include market stalls data into overall data, dragging down the overall trends. Since their rentals are much lower.
• Report on with market stall data included even though we are writing or doing a press release about hawker fares.

If we wanted to make the rents look more expensive we could

• Include drink stall fees, as they have alot higher rentals based on a different model
• Only report on “Central” eateries
• Cherry pick the highest rental figures as if they were representative of the overall trend

As such we have adopted an approach that tries to “get the grasp of the general trend”, rather than get clogged down in trying to capture everything.

Hawker Centres

For hawker centres, the Aug to Oct 2024 data was acquired from NEA’s public data on tenders and bids.

Inclusions: We included conservancy and table cleaning fees. The fact that they were available means that NEA expected them to be incorporated into the business operation mathematics of prospective tenderers. A commercial landlord elsewhere would also sometimes include such fees within the overall rent collected. Finally, they are also unavoidable fees. Thus, we group them together with landlord costs to be considered together as “rent”. Where data did not exist for table cleaning fees, we gave the “benefit of doubt” estimate by taking the lowest stated cleaning fee for that month

Exclusions: We excluded Indian stalls, Halal stalls, market stalls, and drink stalls because they have different business models and cannot be comparable to extract a trend. They may have greater supply due to quotas imposed and may also be exposed to lower demand due to restricted appeal to the majority Chinese foot traffic. 

Any given month with a lot of Halal stalls will bring down the median and inversely for drink stalls. As we did not population control or segment the data for this study (too much effort, but please feel free if you have the time), we opted to only report on the cooked food data as it is both the subject of most hawker fare discussion and a sample group of stalls with lesser internal discrepancies in business model.

Other Factors Not Considered: That is not to say internal discrepancies don’t exist. Within even the cooked food data set there appears to be significant difference between “famous locations” like Newton Food Centre, versus “cheap but central” locations like Chinatown Complex versus non-central areas. The reason for this is quite simple—I’m not a real-estate expert. A stall in a central or even famous location may by virtue of being far from foot-traffic be much less viable than a streetside store with high traffic in a non-central area. Without a stall by stall analysis by an expert, we cannot categorise properly. Also this is not an issue solvable by pure numbers either, especially with tender data—a proliferation of unideal stores might occur due to poor construction or high turnover which suppresses rental numbers, but that number would not be representative of the high-traffic stores that most consumers are exposed to and are interested in discussing. For now, we recognise this shortfall and await more precise data by a real-estate expert who can speak to this

Coffee Shops

For coffee shops, the data was retrieved from https://www.stall.sg/.

Inclusions: If the listing had provided information on cleaning, water and electrical bills, management fees, or other fees, they were included in the final monthly rental costs.

Exclusions: We excluded data from specific locations as their business models are not representative. Similar to the hawker centre research, we excluded Indian stalls, Halal stalls, and drink stalls. We also excluded schools, hospitals, employee canteens, etc.

Other Factors: There is incomplete information regarding the cleaning fees, water and electrical bills, etc., so the rental prices may be slightly over/understated.

Spreadsheet Data: SG Hawker / Coffee Shop Rough Rental Analysis – Google Drive 

The main working file, contains Raw Data lines, methodology, findings, etc.  

The “Raw-er” direct data is from the NEA Tenders page, relinking here for your ease of access: Tender Notice.

At medians between SGD$2900-3300/month, we found that the “landlord costs” for cooked food stalls in both NEA and external commercial stalls were significant and quite a bit higher than the numbers quoted by CNA (which are based off the NEA snippet).

The reasons for the difference are many. The most human explanation may be that all government agencies need to project good numbers, which shapes the behaviour of their data analysts which shapes the nature of the data presented by the agency – and my suspicion is that some methodological choices were made in order to present better numbers (strategic grouping of data, strategic timespan of data).

There is nothing strictly wrong with that, people need to do their jobs – but that is why counterpoint data and analysis is important, as it allows us to treat data like all kinds of espoused facts… Critically, with the standpoint of the person giving the data taken into consideration. 

The second reason may be that we are talking about different things. The median Assessed market rent (AMR) is not the current actual rent nor it is the ongoing trend for rents. It is an assessment benchmark made by an independent valuer used to moderate stallholder’s rent upon their renewal. While the AMR is a useful benchmark in the absence of other tools – NEA tender information is public and in the context of talking about current rises in hawker food prices, it is in our opinion a more direct and useful source of data.

Hence we find that, to the extent these “landlord costs” are representative of the overall cost trends for hawker fares, we think that rents are an important point of discussion for policy around hawker food and its costs.

However, they were not as high as feared and it does seem for now that the excessive 6k+ hawker rentals reported in other news are indeed outliers, drink stalls or specifically lucrative locations. They do exist, but are not representative of the overall trend

More interestingly, exceedingly LOW rentals were found in certain locations (Chinatown Complex) and especially with Malay/Indian stalls, though some do pay market or above market prices also. 

Given that the monthly operating costs of a hawker are around 10,000 SGD. (I couldn’t get a reliable figure, and tbh there is likely alot of variance here also – but 10k appears to be an agreeable number. Rental therefore accounts for ~30% of operating costs in total, and while it is quite high, it does not alone represent a good reason for an outsized increase in prices of hawker food. The other factors, such as wages, raw material cost and operational costs are also significant. There may also be the explanation that customer to hawker ratios are changing, this may be due to a bunch of reasons and a specialist would have a better answer if this is the case.

• Eat at the Halal / Indian Stall
• Don’t buy drinks if you want to save money (duh)
• Try exploring further and in more ulu places for good and cheap food. According to the data, a number of low rental hawkers still exist, but its unlikely they are in immediately accessible high traffic areas
• Actually stalk the NEA tender page for low rental places

We recognize that the sample size could be larger, that commercial real estate is super complex and there may have been other more valid ways to go about the data. 

If you have any comments, feedback and alternative analysis (the data is public on NEA’s Tender Page), please feel free to contact us at qe@asleepyfishingvillage.com

For now, we just wanted to provide an initial counterpoint to the 1.2k AMR figure and hope we have done so in a reasonable way.

Edit (16th Jan 2025): Minor spelling and wording fixes. I would also like to add a few more comments below:

Upon some discussion on the topic on r/singapore and sometime spent brewing on this topic, I think the following needs to be considered further:

1. The discussion of “rent” as a number is always incomplete without deeper knowledge on the other fixed charges hidden within the rental contract (such as cleaning fees, service fees, miscellaneous other fees), as such fees allow a prospective landlord to publish “low rents” while shifting much of the actual cost into these other fees. The effort in trying to capture such data is quite implausible without a dedicated study that goes into the accounting of a significant and representative sample of hawkers.

2. A limitation of any study or statistics NEA subsidised or non-subsidised hawkers is incomplete, by nature of significant Singaporean population centres not being serviced by these. In practice, many Singaporeans experience “hawker food” through coffeeshops, food courts and SEHCs. To limit the discussion to NEA Hawkers or to portray NEA Hawkers as conclusive representatives would not address the issue sufficiently. As NEA Hawker Centres do not try to recoup building and land costs from rent, NEA Hawkers (even non-subsidised ones) represent a rather privileged class.

3. The November 2024 NEA Tender data seems higher than the trend reported here. However it is not conclusive that there is indeed an upwards trend, I’ll monitor this more if I have the time.

4. More productively, there is a point that only surfaced after some later thought for me. Even assuming rents and factor inputs of material, utilities and labor are stable, Singaporean Hawkers may still face pressure to raise prices simply because their customer base decreases as Singaporean affluence rises. This is an interesting point, as if we assume hawkers must take home a certain sum of profit to remain viable, they can do so more easily as their customer base is larger and they earn their margin on items sold more times. With this increased revenue base, the burden of fixed costs like rentals decrease as well.

What it seems to me is that while affluent Singaporeans (even those of meagre success) still care conceptually about hawker food remaining affordable, as both a socialist goodwill to their less fortunate brethren as well as their own safety net as they ponder about harder times, the reality is that very few of their weekly meals are spent at hawker centres. Instead much expense is made to the “nicer” restaurants. The shift in actual behavior by Singaporeans as they become more affluent reduces the potential revenue base of hawkers and thus puts a pressure on them to increase prices to remain viable.

We can easily tell if this is a significant reason by investigating the population size a hawker centre caters to, the proportion of that population that visits the hawker centre + how often, and seeing how those numbers change over time and if that correlates with increased affluence of the said population. Difficult stats to get for sure, but important ones if this issue is of national importance.

This is because if this fall in demand is a predominant reason, then a very happy and straight forward solution is possible by simply rallying consumer preferences around hawker food. A very politically expedient thing for a government to do, to shift the burden to its citizenry and tell them that the solution is take upon each of us the task of eating great food at cheap prices.

This of course taken together with controls that prevent landlords from “consuming” the gains made by the hawkers from the increased revenue – concerns that may ring true in any rental market that operates via “bidding” – where the highest bid could theoretically constitute the largest profit considered (given the most effective business plan) minus the lowest operator wages considered. Such a rent setting system would likely create situations where although business efficacy is high (to the boon or detriment of consumers, depending on their availability of choice), the wages taken by the operator remain low.

A hard limitation on total landlord costs as a percentage of hawker revenue would be interesting, though its implementation can be troublesome due to the hawker’s ability to take cash payments and underreport revenue. Perhaps an interesting mixed approach, where the bidder submits their projected revenue alongside their rental bid- and must report evidence that their actual revenue is in excess of their projected revenue as a condition for continued rentals. It is though hard to see a proliferation of such an approach in the private coffeeshops and food  courts. It is a question I will continue to ponder.

5. The lack of competition in newer neighborhoods due to localized monopolies of F&B services is worth investigating, especially for Punggol and Tengah.