Stalls at new hawker centres to pay lower rents under NEA’s staggered rent scheme

Stalls at new hawker centres to pay lower rents under NEA’s staggered rent scheme

Stallholders at new hawker centres will pay lower rentals in the first two years, under a staggered rent scheme announced by the National Environment Agency (NEA) on Monday (Aug 26). Vanessa Lim with more.

SINGAPORE: Stallholders at new hawker centres will pay lower rentals in the first two years, under a staggered rent scheme announced by the National Environment Agency (NEA) on Monday (Aug 26).

They will pay 80 per cent of stall rentals in the first year of the hawker centre’s operations, and 90 per cent in the second year. Full rental rates kick in from the third year.

The scheme will apply to the 13 new social enterprise hawker centres (SEHCs) that will be completed by 2027, starting with the one at Bukit Canberra in Sembawang which is scheduled to open in the second half of 2020.

Two years is generally the time it takes for new hawker centres to raise customer awareness and build a regular clientele, said NEA, referencing regular reviews conducted.

In addition, three of the existing seven SEHCs – at Yishun Park, Jurong West and Pasir Ris Central – will also benefit from a 10 per cent rental remission for six months. New stallholders who begin their tenancy between Sep 1, 2019 and Feb 29, 2020 are eligible.

According to NEA, the median rent across the seven SEHCs is S$2,000, which means stallholders at the three newer hawker centres can save around S$200 a month.

“The discount is a bonus, it will be good to have and it will help in some way or another,” said 35-year-old hawker Kenny Wong, who has been running his noodle shop at Yishun Park Hawker Centre for eight months.

“NEA has been implementing new changes and improvements in the management here every three to four months,” he added. “I will rely on them for that because we only know how to make food, and I don’t know anything about management.”

Kenny Wong, who runs a noodle shop Yishun Park Hawker Centre
Kenny Wong has been running his noodle shop at Yishun Park Hawker Centre for eight months. (Photo: Corine Tiah)

Another hawker at Yishun Park, 42-year-old Michael Quinn, said that “the subsidies really help.”

“I think it really benefit (us) because compared to restaurants where you can buy premium ingredients, here you’re trying to find the middle ground and sell people decent food at reasonable prices,” said the former Marche chef who now runs a western cuisine stall.

“So far, the feedback has been good, the customers are quite nice and the weekend here had a lot of activity … I think they're doing their best to try to promote and bring people in.”

Hawker Michael Quinn and his business partner Jillian Phua
Irish Michael Quinn and his business partner, Jillian Phua. He operates a western cuisine shop at Yishun. (Photo: Corine Tiah)

The other four existing SEHCs have been operating for more than two years and are “doing well”, said NEA, which is why there is no need to extend the staggered rent scheme to them.

“Based on the principle that they need about two years to stabilise, these centers are actually all in their third year and beyond. In fact, of the four, two of them are in their second term of operation,” said NEA.

“If they are already established, there is no reason to subsidise them.”

ADJUSTING TENDER EVALUATION FOR UPCOMING HAWKER CENTRES

The social enterprise management model of running hawker centres was introduced with the aim of keeping food prices low while making the hawker trade sustainable.

Under this management model, operators also provide services like centralised dishwashing and cleaning.

Such hawker centres came under the spotlight last year when some stallholders complained about the extra fees levied on top of rental and other charges such as tray-return fees.

READ: Some social enterprise hawkers unconvinced by business model of packaged charges

READ: Alternative social enterprise hawker management model still being evaluated: Amy Khor

It prompted the NEA to take a closer look into how these SEHCs are run, with Senior Minister of State for Environment and Water Resources Amy Khor saying last October that she had asked the agency to “quickly iron out the problems” concerning cost and contractual terms.

On Monday, NEA said it is fine-tuning the criteria for evaluating tender proposals from socially-conscious enterprises interested to operate the upcoming hawker centres.

Currently, operators who propose lower stall rentals and operating costs are considered more favourably.

“In future tenders for new hawker centres, even greater consideration will be given to the proposed total costs to stallholders,” said NEA.

“At the same time, on the business side, proposed initiatives that drive footfall to the hawker centre will also be considered in the tender evaluation, as footfall will ultimately drive patronage and the business success for the hawkers.”

On the staggered rent scheme, NEA said it will be in addition to the subsidy for centralised dishwashing service, which has been in effect since Jan 1.

Under this scheme, NEA co-funds the cost of dishwashing service with stallholders at 50 per cent for the first year and 30 per cent for the second year.

These efforts are aimed at addressing the key challenges identified, which are the high median age of hawkers, the “hard and physical” nature of hawker life and the opening of hawker centres for all three meals, said NEA.

“We will always make sure that these hawker centres will fulfil our social objectives of ensuring that our residents have access to affordable food in a hygienic environment,” said Dr Khor, who visited Yishun Park Hawker Centre on Monday.

“At the same time, we have to safeguard the well-being of our hawkers, make sure that they can make a decent living and that our hawker centres remain as vibrant social spaces, community dining rooms for Singaporeans.”

Source: CNA/gs

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