SG Complains

Little India is bearing the brunt of the increase due to rising visitor numbers from the Indian sub-continent.

With an influx of visitors from India into Singapore, Little India is undergoing a revival.

Some hotels there are reporting 100 percent occupancy while the number of restaurants has increased by 30 percent from 2005.

And landlords are sitting up. They have raised their rents by 20 percent to 50 percent in recent months.

For tenants, this sharp hike has come out of the blue, as rents have held steady over the past four years. They said it is hitting them hard.

“It should be kept down to about 10-12 percent. The restaurant business now is more competitive. It’s difficult to make huge profits, competition is very high,” said G. Shanmugam, president of the Indian Restaurant Association Singapore.

Some market watchers warned that the sharp increases may not be sustainable.

Said Colin Tan, head of research and consultancy at Chesterton International: “There are more Indian nationals, foreign talent coming to Singapore. Due to this increase in business, maybe the rentals have moved up.

“Normally the increases are in the order of 10 to 20 percent. So unless there is a sudden surge in interest or uplift in confidence, normally we don’t see this kind of increases.

“I suspect it could be because the landlords have not been monitoring the market, and when they decide to do a review, they feel that the market has been on the low side.”

But Little India is not alone. Businesses elsewhere are also being hit by rental hikes.

“Those in Holland Village and Maharaja have been forking out 32 percent rental increase starting from one to two months ago. And many other restaurants are also suffering from the same problem – increase in rental,” said Shanmugam.

“With Holland V, there’s a new MRT station coming up. Usually, two to three years before the MRT station becomes operational, landlords around the area will take the opportunity to upgrade… They’ll clear out the tenants, upgrade premises, and renegotiate with new tenants at higher rates,” explained Tan.