Koh Poh Koon says high bids ‘not the norm’, after $10,158 bid for Marine Parade Central hawker stall

SINGAPORE – While a few stalls at popular locations have attracted high bids, with five at the Marine Parade Central hawker centre crossing $8,000, such tender prices are not the norm, said Senior Minister of State for Sustainability and the Environment Koh Poh Koon.

He was responding on Sept 9 to Mr Yip Hon Weng (Yio Chu Kang), who asked if a recent bid of over $10,000 for a stall at Marine Parade Central Market and Food Centre indicated a trend of escalating hawker stall rentals, and how this would impact food affordability for Singaporeans.

A recent bid of $10,158 for a vacant unit at Marine Parade Central Market and Food Centre had raised eyebrows among netizens in August, with some expressing concern about the impact of high stall rentals on the cost of hawker food.

Dr Koh told Parliament the median successful tender price for cooked food stalls across hawker centres was about $1,800 in 2023. About a fifth of such stalls were awarded at tender prices at or below $500 in 2023.

The median monthly rent of non-subsidised cooked food stalls across hawker centres is about $1,250, and has remained at this level since 2015, he added.

According to a tender notice in July, the bid of $10,158 was the second-highest bid for the stall at the Marine Parade Central hawker centre, after a $10,680 bid that was withdrawn. The next three highest bids ranged between $8,113 and $9,500.

Dr Koh said the recent tender for the stall was “quite competitive”, attracting more than 40 bids.

He noted that the hawker centre is very popular, as it is open for the three meals throughout the day and has good footfall. Marine Parade MRT station, which opened on June 23, has an exit that leads to the hawker centre.

A survey by the National Environment Agency (NEA) found that stall rental makes up less than 10 per cent of stallholders’ operating costs, compared with raw materials, at 56 per cent, and manpower, at 20 per cent, Dr Koh said.

Replying to Mr Yip’s question on support for small business owners and new hawkers to help them with rising stall rentals, Dr Koh said only about 4 per cent of cooked food stalls in hawker centres today are paying rent above the assessed market rent. The remaining 6,000 stallholders pay rent no higher than this value.

NEA – which runs 121 hawker centres in Singapore – has put in place measures to ensure rental prices of hawker stalls are fair and not speculative, he added.

These include disallowing subletting or assigning of hawker stalls to prevent stallholders from engaging in rent-seeking behaviour, and removing the reserve rent in the tender of vacant stalls to allow rental rates to fully reflect market conditions.

Since September 2019, operators of new hawker centres have been required to stagger rentals for the first two years of operations such that stallholders pay 80 per cent of the stall’s rental in the first year, and 90 per cent in the second year.

Dr Koh said this is to help stallholders manage their operating costs as they gradually establish a clientele in the new hawker centre.

Tendered rents are also adjusted to the market rate determined through independent professional valuation after the stallholders’ first tenancy period of three years, he noted.

Dr Koh added: “For those who have, for example, paid a very high price – $10,000, $8,000 – in their first tenancy term, this price will hold. But following their first tenancy term, that price will be adjusted to the assessed market rent, which, as I said, is about $1,200 thereabouts, so that will help to make the price more sustainable for this hawker in the longer term over the next tenancy term.”

At Marine Parade Central Market and Food Centre, a hawker who wanted to be known only as Mr Yang, 53, said his wife Yang Ailan had submitted the $10,158 bid for the vacant stall as their son, who is in his late 20s, wants to start his own cooked food business.

Mr Yang, who helps his wife run a drink stall just four units away from the vacant unit, told ST in Mandarin: “Our son works in the car industry, but he’s not sure how stable it is since the economy isn’t doing so well. So he wants to open his own stall.”

He added: “We thought this would be a good place because we’ve had a drinks stall at this hawker centre for over 10 years, it’s clean, and we are very familiar with the area.”

A 20 per cent to 30 per cent improvement in their drink stall’s business since Marine Parade MRT station opened gave his wife the push to make the bid, said Mr Yang, who added that the tender for the stall has not been awarded.

Other hawkers at the food centre were less sanguine about the prospect of opening a stall with a monthly rental of over $10,000.

Mr Remus Seow, 28, who operates a Japanese fusion food stall, said a 20 per cent increase in sales after the station’s opening lasted only a month, and business has been only marginally better since then.

He told ST: “It’s not fair for them to bid this high because people might fight to meet the price and this could push up future bids. If that happens, who is going to take over the old generation of hawkers, and keep affordable food available for Singaporeans?”

In August 2018, the issue of high tender bids for hawker stalls was also in the spotlight after a woman made

a successful $10,028 bid for a stall

to sell drinks at Chomp Chomp Food Centre, only to end the tenancy agreement the same day she signed it.

NEA had called the bid – the highest successful bid received up till then – an “outlier”.

Citing two studies that showed stall rentals comprised only 12 per cent of hawkers’ overall costs, and hawkers generally priced food according to what the market can bear, then Senior Minister of State for the Environment and Water Resources Amy Khor told Parliament at the time that stall rentals do not directly affect food prices.

Correction note: In an earlier version of the story, we reported that the median assessed market rent for cooked food stalls is $1,800 to $2,500. The Ministry of Sustainability and the Environment has clarified that the correct figure should be $1,200.