Factors Influencing Rental Cost of Hawker Stalls
Ministry of Sustainability and the EnvironmentSpeakers
Summary
This question concerns Er Dr Lee Bee Wah’s inquiry into factors influencing hawker stall rentals, tender selection criteria, and the specific costs associated with Yishun Park Hawker Centre. Minister for the Environment and Water Resources Masagos Zulkifli B M M explained that rentals are driven by location and market demand, while tenders are awarded based on bid amounts and food trade compliance. To ensure affordability, the Government disallowed stall subletting and removed reserve rents, resulting in over 85% of hawkers paying less than $1,500 in monthly rent. Regarding Yishun Park, the Minister noted it is managed on a not-for-profit basis with selection criteria focusing on food quality, price, and productivity measures. He affirmed that the Government monitors these centres to ensure they meet resident needs for affordable and hygienic food while maintaining comparable rental rates.
Transcript
47 Er Dr Lee Bee Wah asked the Minister for the Environment and Water Resources (a) what are the factors that influence the rental cost of hawker stalls; (b) aside from the tender amount, what other criteria determine the success of a tender applicant; (c) what is being done to keep monthly rentals of hawker stalls more affordable; and (d) why do Yishun Park Hawker Centre tenderers have to pay at least twice the average bid to get a stall.
Mr Masagos Zulkifli B M M: The Government lets out hawker stalls to interested Singaporeans and Permanent Residents through open tenders. A hawker stall is awarded based on the bid amount and the proposed food to be sold which, in turn, has to comply with the designated trade for that stall as indicated in the tender notice. For example, if a cooked food stall is designated as a "Halal Cooked Food" stall, a bidder who proposes to sell drinks would not be successful, regardless of the bid amount.
The amount that an applicant bids for a hawker stall would likely be influenced by factors, such as the location and condition of the hawker centre, stall size, the applicant’s assessment of the potential business volume of the stall as well as previous successful bid amounts at the hawker centre.
To moderate stall rents, we have introduced key policy changes since 2012, such as disallowing stall assignment and subletting to prevent stall owners who have no intention of operating the stalls themselves from engaging in rent seeking behaviour. In addition, we removed the concept of reserve rent to allow the rentals to fully reflect the market demand for the stalls. Since the removal of the reserve rent in 2012, about 53% of the tendered cooked food stalls were awarded at below what the reserve rent would have been. On the whole, more than 85% of our hawkers pay less than $1,500 per month in stall rent. This is generally lower than stall rents in coffee shops or food courts in comparable locations.
The Yishun Park Hawker Centre is a new hawker centre which will be managed by the Timbre+ Hawkers Pte Ltd on a not-for-profit basis. The managing agent was selected following the evaluation of the proposals received for the management of this centre. The evaluation was based on a matrix of price and qualitative criteria to deliver value to both patrons and hawkers. Among the qualitative evaluation criteria are the costs that potential stallholders will pay as well as the ideas to keep food prices affordable and the productivity measures to help the stallholders manage their manpower costs.
The rents of the Yishun Park Hawker Centre are also comparable to other new hawker centres. Timbre will select the stallholders based on a set of evaluation criteria, which are the stall applicant's food type, the food taste and quality, the price of the food and their online presence.
The Government will continue to work closely with Timbre to ensure that the Yishun Park Hawker Centre meets the needs of the residents in providing affordable and hygienic food.