Friday 13 March 2015

Hawker's monthly rent for stall? Just $1

By Audrey Tan, The Straits Times, 12 Mar 2015

HAWKER Ng Khai Choon, 48, secured a stall to sell Indian food at the Commonwealth Crescent Market for a monthly rental rate of just $1.

He has occupied the corner unit on the market's second floor since January this year, after moving from Amoy Street Food Centre when it closed for renovations last December. He paid a monthly rental rate of $900 at Amoy Street, but for the next three years, it will be $1 a month.

Since the National Environment Agency lifted reserve rental rates in 2012, it rents out hawker stalls that receive single bids over two tenders, rather than require competition from multiple bidders.

Echoing what Second Minister for the Environment and Water Resources Grace Fu said in Parliament yesterday about raw materials - not rental rates - making up a large proportion of a hawker's total costs, he said most of his costs stem from ingredients for his dishes, especially his signature kambing (mutton) soup.

"Mutton is extremely expensive. It makes up about 60 per cent to 70 per cent of my total cost," he said.

Mr Ng runs the stall, Bombay Modern Indian Cuisine, single-handedly and thus does not incur extra manpower costs - although he intends to hire help by the middle of next year.

He pays about $300 a month for utilities, and more than $600 a month in cleaning fees.

While he declined to reveal his total monthly takings, he said it was enough to make ends meet.

He added: "I am very lucky to get the stall for just $1, it means I pay only $36 in rent for three years!"

10 more hawker centres to be built
By Audrey Tan. The Straits Times, 12 Mar 2015

TEN more hawker centres will be built over the next 12 years in a bid to moderate hawker rentals and keep food prices affordable, Second Minister for the Environment and Water Resources Grace Fu said yesterday.

The additional centres will be built in new estates or in existing ones that have relatively few hawker centres, such as Bidadari, Sengkang and Bukit Batok, Ms Fu told Parliament during the debate on her ministry's budget.

These will come on top of the 10 hawker centres in 10 years that the Ministry of the Environment and Water Resources (MEWR) had committed in 2011 to build. The first two of those centres will open in Bukit Panjang and Hougang this year.

"Altogether, the 20 new centres will inject an additional supply of more than 800 cooked food stalls and we believe this will help to further moderate rentals," Ms Fu said.

The 800 new stalls amount to a more than 10 per cent increase in cooked-food stalls here. As of January, there were 6,046 of them.

Raising the number of stalls is the latest in a series of policy changes to ensure that hawker centre food prices remain affordable, Ms Fu said in Mandarin.

Among other things, the Government has disallowed stallholders from subletting or assigning their stalls to someone else, and removed the concept of reserve rent so that stall rentals fully reflect market conditions - in some cases falling to as low as $1.

"Our hawker centres are essential social infrastructure - they provide a clean and hygienic environment for our hawkers to ply their trade and enable Singaporeans to access good food at affordable prices," Ms Fu added.

Adding more stalls is expected to help keep food prices in check, going by an analysis conducted last year by the Ministry of Trade and Industry and MEWR.

It showed that while the actual price of food may differ from one hawker centre to another, prices are on average 8.4 per cent lower if there is one other stall in the same centre selling a similar type of food. A hawker centre has about 50 stalls and there are usually a number of them selling similar types of food.

In response to concerns from Mr Yeo Guat Kwang (Ang Mo Kio GRC) about a 2013 report by the Consumers Association of Singapore that showed rising hawker centre rents were linked to more expensive food, Ms Fu said there is "little substantive evidence... that rentals are the main drivers of hawker food prices".

She said rentals typically comprise only about 12 per cent of a hawker's total costs - a small fraction compared to raw materials like ingredients, which make up more than 50 per cent of costs.

Manpower accounts for another 17 per cent of costs, while utilities take up 9 per cent.

Ms Fu also noted yesterday that over 85 per cent of hawkers pay less than $1,500 in monthly rent. Those who pay more are mostly located in the city, such as in Newton or Maxwell, she said.

In an area like Toa Payoh, hawker centre rents average around $650 a month, with more than half of the stalls - primarily subsidised ones - paying $320 or less.

Even if such stalls are excluded, average rents are about $1,100 a month. This "compares favourably to the coffee shops or foodcourts nearby", she added.

Fresh ingredients for new hawker centres?
By Feng Zengkun, Environment Correspondent, Carolyn Khew and Samantha Goh, The Straits Times, 19 Mar 2015

SINGAPORE'S hawker scene has been doing roaring trade in the past five years, with cooked food stalls almost fully occupied and few staying vacant for more than three months.

But with more than 800 stalls coming on board in the next 12 years, food experts and hawkers say that more needs to be done to attract new blood.

Among their suggestions: Let hawkers hire foreigners, who cost less, as assistants; air-condition some of the new centres; and showcase young hawkers more, such as through a television show.

Earlier this month, the Government announced that it will build 10 new hawker centres by 2027. This is on top of the 10 that it had pledged in 2011 to build.

The first two new centres will open in Bukit Panjang and Hougang this year, and others will be built in underserved areas such as Choa Chu Kang, Bukit Batok and Sengkang.

Altogether, the 20 centres will add more than 800 cooked food stalls to the existing 6,046 managed by the National Environment Agency (NEA) as of January, about a 13 per cent rise in supply.

There are also a few hawker centres that are privately owned and managed, such as Lau Pa Sat in the Central Business District.

The NEA told The Straits Times that, as of January, more than 98 per cent of its stalls were occupied, which is consistent with the rates in the past five years.

Vacant stalls are put up for tender every month, and only Singaporeans and permanent residents can bid for them.

"While some stalls situated in less favourable locations may not be as popular with potential tenderers, and may sometimes not attract any bids, on average, these stalls do not stay vacant for more than three months," said NEA.

Several hawkers said that, to fill the hundreds of new stalls coming up, more needs to be done to attract the younger generation to the trade, especially as many veterans are likely to retire in the next decade.

Mr Sulaiman Abu, who is in his 50s, is one of them. The owner of the D'Authentic Nasi Lemak stall in Marine Parade Food Centre said he plans to retire soon and have his children take over. They now help out at the stall.

"But it's very hard to tell if other young people will want to become hawkers. It's long hours and hard work. I wake up by 4am every day and work at least 12 to 14 hours every day," he said.

Mr Sulaiman is one of several master hawkers under the Hawker Master Trainer Pilot Programme that started in 2013.

This is a collaboration between NEA, the Workforce Development Agency (WDA), property firm Knight Frank and The Business Times.

The programme helps to train people to become hawkers and aims to preserve Singapore's much-loved hawker heritage.

The WDA said 46 trainees have completed their foundational training under the pilot, and some are in the midst of on-the-job training with the master hawkers or have just completed it.

Of those who have completed both components, 17 have opened their own stalls or are working with their trainers.

Mr Sulaiman said that the Government could help further by allowing hawkers to hire foreigners as stall assistants.

Currently, they can hire only Singaporeans and permanent residents, but not many want to take up the job, he said.

Dr Leslie Tay, a food blogger and author who runs the website, said air-conditioning of hawker centres and larger stalls might attract young hawkers.

"Air-conditioning is becoming a real necessity. The younger generation have higher expectations and the authorities need to look at how to meet their needs," he said.

Others suggested raising the profiles of young entrants to the trade, such as through publicity campaigns or a television show.

"This industry needs heroes that the world recognises. We need to build a culture that encourages a new breed of street- food stars and entrepreneurs," said Mr K. F. Seetoh, founder of food firm Makansutra.

Several Singaporeans out of the 20 polled by The Straits Times suggested setting aside a few stalls in each hawker centre for more exotic cuisines, like Japanese or Korean food, to attract customers and boost business in general.

A few said they are willing to pay slightly higher prices for hawker fare if it helped the hawkers earn a decent living. They drew the line at $5, but others wanted the prices maintained or lowered.

Freelance property agent Shafiq Haq, 45, said: "In terms of food quality and standards, our hawker centres are quite good already. They are also much cleaner compared with about 15 years ago."

* Costlier raw materials driving up hawker food prices: Study
By Marissa Lee, The Straits Times, 27 May 2015

THE higher price of raw materials, not labour and rent, is the main factor driving up food prices at hawker centres, according to a new study out yesterday.

It noted that a $500 increase in the monthly cost of raw materials - items such as meat and sugar - leads hawkers to raise prices by 20 cents on average, while the same increase in rent lifts prices by only five cents, said the Ministry of Trade and Industry and the National Environment Agency, which conducted the study.

In fact, most hawkers who raised prices between July 2012 and April last year had not experienced rental changes, it added.

The survey also found that hawkers in the Central Business District tend to pass on more of their higher rents to customers as they can take advantage of the relative lack of competition.

There are about 6,000 cooked food stalls in hawker centres across Singapore, managed by the National Environment Agency. Half the stalls enjoy rental subsidies and pay an average of $200 a month. The average rent for a non-subsidised stall is $1,250.

Hawker centres differ from coffee shops, which are managed by the Housing Board. About 40 per cent of the board's 714 coffee shops are leased to a master tenant, who then sublets individual units.

Monthly rent for a four-unit coffee shop can range from $20,000 to $50,000, depending on location, said Mr Thomas Foo, chairman of the Kheng Keow Coffee Merchants Restaurant and Bar Owners Association.

Raw materials are the biggest cost component of most hawker stalls, accounting for about 59 per cent of total expenses, according to a poll of 1,000 hawkers selling five types of foodin 2012 and 2013. Labour accounts for 17 per cent of costs, and rent makes up 12 per cent. As prices of raw materials rise and employers remain stuck in a labour crunch, cost pressures could help explain rising food prices.

Food inflation has consistently come in above headline inflation in recent months. Food prices rose 2.1 per cent last month from the same month a year ago, although consumer prices as a whole fell 0.5 per cent. Hawker food inflation was also at 2.1 per cent last month.

Parliament Q&A: Speech by Ms Grace Fu, Second Minister for the Environment and Water Resources, Committee of Supply Debate, 11 March 2015 (Section B)

No more subletting for stallholders from 1 April 2012

Hawker stall rents down after rules changed in March 2012

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